SA tourism links boost case for rand use in Zimbabwe

Johannesburg - Apart from strong trade ties, there are growing tourism links between Zimbabwe and South Africa, and this is prompting calls for incentives and the promotion of the use of the rand in Zimbabwe.

South Africa’s northern neighbour officially uses multiple currencies, although uptake of the rand has been low owing to value fluctuations in the past few years. However, a crippling shortage of the US dollar and low impact of bond notes are prompting authorities to explore other options – and the rand is increasingly being seen as an option.

South Africa is also a major source market for tourist arrivals into Zimbabwe and most international tourists come into Zimbabwe through South Africa, the Zimbabwe Statistics Agency (Zimstats) confirmed this week.

Reserve Bank of Zimbabwe governor John Mangudya says rand receipts from the tourism sector have been added on to the list of industries receiving a 5% incentive on export receipts.

“In the African region, South Africa was the leading source market for visitors to Zimbabwe – with 38.1%, followed by Zambia and Malawi – both accounting for around 18%,” said Zimstats in its Zimbabwe Visitor Exit Survey Report 2015/16, released this week.

In the first quarter of 2016, tourist arrivals into Zimbabwe from mainland Africa, which accounts for around 80% of the total number of visitors to Zimbabwe, increased by 11% to 380 790.

Stats SA recently said Zimbabwe was a major source market of African tourist arrivals into the continent’s most industrialised economy.

READ: SA accounts for 79% of Zim's import bill 

It said 2 million in arrivals, accounting for the highest number of tourist arrivals in South Africa from the continent, were from Zimbabwe, followed by Lesotho with 1.7 million and Mozambique at 1.2 million.

Zimbabwe’s tourism minister, Walter Mzembi, said measures to incentivise rand use in Zimbabwe should be introduced to improve the competitiveness of the sector.

He said there was currently “no incentive for a rand source market to holiday in Zimbabwe” and called on the central bank to “incentivise rand acceptance as transactional currency in the tourism sector”, which will boost convenience.

According to the Zimbabwe Tourism Authority, South Africa is a major access point for tourists travelling to Zimbabwe owing to the country’s wide network of flights linking Cape Town, Johannesburg and Durban to other source markets.

READ: Regional airlines flock to Zim as it opens its skies 

President Robert Mugabe said in a state-televised interview last week that Zimbabwe should be using multiple currencies, instead of relying on the US dollar, which is in short supply.

“We are in a multiple-currency system. I don’t know why the finance minister and the Reserve Bank governor had not wanted to use other currencies such as the rand, the euro or the yen. They say we are going to do it, but have been hesitant,” said Mugabe.

The government has, however, been reluctant to officially or unofficially adopt the rand, with Mangudya previously saying Zimbabwe needed to have its own substantive currency first before it could ask to join the rand monetary union.

According to Zimstats, the “highest expenditure [by tourists arriving in Zimbabwe in 2015 and 2016] was on food and beverages”, followed by accommodation.

However, tourists have complained about poor police services at numerous roadblocks, as well as poor road networks and other infrastructure.

Zimbabwe is reliant on its southern neighbour for most raw materials and other finished products.

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