If I had to give my take on Zimbabwe and its launch of a new, gold-backed currency, I would say that that I don't see it making much of a difference to Zimbabwe's general economic prospects.
Zim has been struggling to tame hyperinflation for decades as a result of low economic output. It's largely a supply issue. So, while tying the currency to gold will help limit money-printing, I don't see how it will address the core issue at hand. Zim is still overly reliant on imports.
I think that if they further reform their indigenization laws and send a clear signal to investors abroad that the land grabbing is forever a thing of the past, then they'll be able to attract the FDI (and the tech and expertise that comes with it) to boost exports and manufacturing, thus growing the economic pie while simultaneously reducing their reliance on imports.
But this requires real structural change and political will, not shock value political stunts.
The news about Zimbabwe is great to hear. But out of interest his much of a gold reserve would be needed to sustain this initiative? Could you possibly do an article to educate us further?
Great updates on the latest happenings in Africa!
If I had to give my take on Zimbabwe and its launch of a new, gold-backed currency, I would say that that I don't see it making much of a difference to Zimbabwe's general economic prospects.
Zim has been struggling to tame hyperinflation for decades as a result of low economic output. It's largely a supply issue. So, while tying the currency to gold will help limit money-printing, I don't see how it will address the core issue at hand. Zim is still overly reliant on imports.
I think that if they further reform their indigenization laws and send a clear signal to investors abroad that the land grabbing is forever a thing of the past, then they'll be able to attract the FDI (and the tech and expertise that comes with it) to boost exports and manufacturing, thus growing the economic pie while simultaneously reducing their reliance on imports.
But this requires real structural change and political will, not shock value political stunts.
The news about Zimbabwe is great to hear. But out of interest his much of a gold reserve would be needed to sustain this initiative? Could you possibly do an article to educate us further?
Always good to hear great news about my country, Zimbabwe!