No, there was no exchange rate for Zim dollar during the GNU

George Guvamatanga
The Claim: The exchange rate between the Zimbabwe dollar and the US dollar was 1:2, 5 during the Government of National Unity (GNU).
The Verdict: claim verdict

CLAIM:  The exchange rate between the Zimbabwe dollar and the US dollar was 1:2, 5 during the Government of National Unity (GNU).

VERDICT: INCORRECT

BACKGROUND

Permanent Secretary in the Ministry of Finance and Economic Development, George Guvamatanga on 27 June 2022 claimed that the exchange rate between the Zimbabwe dollar and the US dollar was 1:2,5 despite the fact that the local currency was no longer in circulation.

Guvamatanga was speaking during a press conference organised by his ministry in Harare.

“I would then want to dispel another notion that has always been shared very widely to say that previously during the Government of National Unity, the minimum salary (for a civil servant) was US$540,” said Guvamatanga.  

“That’s also not correct because, at that particular moment in time, the exchange rate in the market was US$1: ZWL$2, 5. If you want to work out the correct USD, you have to take the US$540 and divide it by 2, 5 to get what was the real salary in US dollars.”

Zimbabwe abandoned the use of its inflation-ravaged currency in 2009 and adopted a multicurrency system anchored on the US dollar. For the whole tenure of the GNU (2009-2013) the Zimbabwe dollar was defunct.

“It is difficult to interpret the statement that George Guvamatanga uttered during the pronouncement of the raft of policy initiatives aimed at stabilising the local currency and the prices in the economy,” said economist Stevenson Dlamini.

“What I can attest to is that in February 2009 the Government of Zimbabwe abandoned the use of the Zimbabwean Dollar and adopted a basket of currencies that included the US dollar, South African Rand, The British Pound, the Botswana Pula and the Euro. This basket, of five currencies, was recognised as legal tender for the period 2009-2013.”

He added: “Therefore based on the above facts it suffices that the Zimbabwean economy had no local currency and consequently no exchange rate against a local currency. 

An exchange rate assumes that the currency was in circulation of which the ZWL$ was not in use in the period referred to. In essence, alleging that there was an exchange rate of 1:2.5 is inapplicable to the period 2009-2013.”

Another economist, Prosper Chitambara said Zimbabwe was dollarised during the GNU period, adding there was no exchange rate for the local currency

Prosper Chitambira

                                               

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