In its 2011 budget input to treasury, the CZI said these minted coins would be fully backed by US dollar reserves that the country has. Finance minister Tendai Biti will table the 2011 National Budget in Parliament on Thursday.
“(The) outcry from public circles on the continued use of the multi-currency system has been the issue of change,” reads the CZI input. “This is an issue that government needs to address…(We must) mint our own US dollar equivalent coins backed 100% by US dollar reserves.”
Industry said the multi-currency system should be maintained because it brought economic stability.
“The system has also revived business which, however, is slowly being diminished by the continued talk about the return of the Zimbabwe dollar,” the CZI said. “The nation needs to be reassured that until all fundamentals are in place, the Zimbabwe dollar will not return into circulation.”
Industry also recommended the gazetting of a statutory instrument demonetising the Zimbabwe dollar.
Despite discontinuing the use of the local unit, it is still recognised as legal tender at law as there has been no legal instrument formally demonitising it.
The CZI said it was researching on the most appropriate reference currency to be used in the country after it abandoned its initial recommendation that the rand rather than the United States dollar be the main currency.
“Previously as an organisation we felt 100% sure that the rand was the way to go, but debate and discussions held since our last submission have made us rethink the position and seek more information on the issue,” said the CZI.
“Once this paper has been thoroughly researched and we have a position, this position will be forwarded to the Ministry of Finance.”
In its submissions to treasury, the CZI said lack of clarity on the indigenisation process was another issue that should be dealt with in the 2011 National Budget.
“Business needs clarity on the indigenisation process as this is negatively impacting on both foreign and local investment,” the industry said.
“Implementation of the GPA (Global Political Agreement) is crucial –– politics is still our biggest threat to economic recovery. Government needs to realise that policy consistency (pronouncements and implementation) is paramount to achieving a stable operating environment.”
The country’s manufacturing sector has failed to fully take off because of old machinery, high labour costs and a lag in technological development, the CZI said.
The CZI, which is a body that represents businesses mainly from the manufacturing sector, said companies were struggling to access lines of credit because of the tight
liquidity conditions prevailing in the
“This is rendering most sectors uncompetitive, both on the international markets and the domestic market where products are facing stiff competition,” said the CZI.
The industry said it was, therefore, important that government adopted policies focused on the poor, employment creation and economic growth to increase capacity utilisation.
The CZI identified power shortages and outages, high input costs, difficulties in accessing lines of credit, low plant capacity utilisation and high wage demands as the major issues industry was grappling with.
Other submissions made by CZI include the issuing of tradable tax credit certificates that could be used instead of tax payments by those companies which are owed by the Reserve Bank of Zimbabwe.