Businesses in the resort town of Victoria Falls have been reported as largely rejecting the RTGS dollar. From small businesses, tuckshop, transport operators, accommodation providers and even the local authority. This has left residents in a quandary as many still earn in the local RTGS dollar which has seen better days in. Both the interbank and parallel markets.
According to the reports, large retail shops still accept the RTGS dollar but the risk is they would soon shun it too. However, given that pricing has long been done in US dollar terms and translated to RTGS dollar at the prevailing available rate the distinction is academic. We are effectively priced and paying in US dollars.
The local authority caused a stir as they too moved for US dollar pricing. The council proposed a supplementary budget denominated in US dollars. This was met with outrage by residents as the revenue would also have to be denominated in US dollars.in spite of the resistance the council later passed this resolution. This is in spite of a directive from the government preventing local authorities from doing so.
But there’s a method to their madness
In the narrative of profiteering businesses, we have lost an essential step; businesses need stability. And just as much as we call them businesses they are run and owned by people, who require stability and that is what the US dollar provides. The strength of a currency is not measured by its relative exchange to other currencies at one point in time but by how that exchange rate holds up over time. Losing 60% in 4 months doesn’t bode well. Incidentally, that 60% drop is the same in the parallel and interbank markets.
With year on year inflation within touching distance of 100% pricing in the RTGS dollar is hardly sustainable. The other side of the coin must be addressed as employees should also earn in US dollars in order to complete the loop and according to reports, this is not the case.
In closing, I recall the road to eventual dollarisation in 2009 was not easy either. It was approached with denial but eventually, necessity won. Contrary to what people may have you believe dollarisation in 2009 was not without its teething pains either. While the landscapes then and now are two very different things it remains the option that many believe will sort out some of our problems.