Insurance and Pensions Apex Council pleads to re-dollarisation
HARARE, The Zimbabwe Insurance and Pensions Apex Council (ZIPAC) has pleaded with the Finance minister to allow the sector to re-dollarise in the face of a growing informal sector.
Zipac board chair Tassius Chigariro, yesterday told the industry during the inaugural insurance and pensions industry breakfast meeting which FinMIn Mthuli Ncube presided as guest of honour that the sector needed immediate rescue.
“The greatest fear of our industry is that, the informal market, which is growing at incredible speed, will completely dollarise, while, the financial institutions that we so need to help recovery of our nation, are formally de-dollarised but completely taken out of the financial system. We are your joint partner in attracting FDI, please honourable minister do not watch us dying.” he said.
It is barely a year after Ncube banned the multicurrency system making the Zimdollar the sole legal tender.
However the economy has been self dollarising except for the formal sector. Chigariro said when the statutory instrument 142 was announced, the industry was initially not concerned as the interpretation was the act still allowed us to contract in USD.
“..but the SI required us to only transact in RTGS.As an industry we were confused, when a further Directive banned us from contracting in USD. Honorable minister, you of course know that, Contracting and Transacting are different. Insurance industry can only exist when it delivers on its role, which is, to indemnify a customer in the event of a loss.” he said.
He added that even the industry understands the benefits of using local currency and is committed to support until it stabilizes, it was not oblivious to the fact that even the rural folks in remote areas still think in USD terms.
Chigariro said the industry had the capacity to mobilize billions of dollars that can be directed towards national development goals explaining the role played by this industry in developed nations.
“We therefore hope that, in future we get opportunities to sit in the room with you and share ideas of how we can work together. It is difficult for our industry to operate on directives that often negatively impact our growth and our contribution.” he said.
ZIPAC was formed to ease and facilitate communication between the industry and authorities – the Government and Regulators.
Its membership include The Zimbabwe Association of Pension Funds (ZAPF), The Life Offices Association of Zimbabwe (LOAZ) , Insurance Council of Zimbabwe (ICZ) which coordinates the Short, Zimbabwe Association of Funeral Assurers (ZAFA), the guys that Insurance Brokers Association of Zimbabwe (IBAZ ) and Zimbabwe Insurance Loss Adjusters (ZILA).