The main opposition leader has put his weight behind the re-dollarisation argument as the local RTGS continues to lose its value, creating economic instability and forcing some businesses to shut down operations. The debate heated up this week as the exchange rate on the black market hit a 1:400 rate which ultimately led to the rise in prices for basic commodities.
The government reintroduced the local currency in 2019 after a decade of dollarisation, but the local currency has since then been heavily eroded by inflation due to low confidence, leading to a thriving parallel market. The low confidence can never be changed by policy, crackdown, or even command, the economy is by default stubborn.
Last week, Econet Wireless launched “Smart US dollar bundles” that allow its customers to purchase airtime, data, and SMS products in US dollars, another indication that the local currency is continuing to weaken as it loses value against hard currencies. The government is charging passport and media accreditation fees, among many other services, in foreign currency, further undermining confidence in the local currency.