Zimbabwe/SA

Adoption of rand a possibility as import duties suspended

Article published on the 2009-02-09 Latest update 2009-02-09 16:15 TU

Patrick Chinamasa holds up a briefcase containing the government's budget at the Parliament buildings in Harare
(Credit: Reuters)

Zimbabwe has suspended import duties on household staples for the next six months, in an attempt to ease the burden on cash-strapped households. Rice, cooking oil margarine and salt are on the list, while duties were also suspended on non-edible items such as toothpaste, soap and washing powder.

This new measure, announced in the state paper The Herald on Monday, will be valid until 30 June and could be renewed based on whether basic goods can to be manufactured nationally.

Acting Finance Minister Patrick Chinamasa said the measure was created to try and expand the country's industrial capacity to meet local need.

In January, the UN agency World Food Programme reported that over half of the population of Zimbabwe was undernourished.

In related news, South African President Kgalema Motlanthe said on Sunday that Zimbabwe could adopt the South African rand as a standard for its currency.

"Change everybody's money to a rand balance so that they can ... [write] checks against it, make payments, and everybody can get back to work very quickly. I think this is the best possible idea," Zimbabwean economist John Robertson told RFI.

Economists in South Africa, however, are skeptical. "Moving from the Zimbabwe dollar to the South Africa rand monetary base is highly unlikely, given the limited amount of foreign reserves," Thea Fouri, a South African economist with the think tank Global Insight told RFI. 

 Prices in Zimbabwe rose by 231 per cent in July 2008. This was the last time the figures were made public.