The announcement of Statutory Instrument 142 of 2019 which outlawed the use of multi-currency system that has been in operation since 2009, adds another chapter, or rather a new low in ZANU PF’s non-consultative approach to governance.
By Farai Maguwu and Darlington Nyambiya
A careful look at how Zimbabwe finds itself deep in an intractable economic quagmire points to ZANU PF’s lack of respect for the views of the Zimbabwean people. Ironically there is evidence the people of Zimbabwe understand economics better than the Government.
More often than not, they have created parallel economic policies that have sustained life and the economy when compared to government’s predatory economics that have send the economy into a tailspin, distorted prices, created shortages and depleted people’s savings whilst enriching the ZANU PF – military complex. Back in 2008; by the time Zimbabwe’s annual inflation rate had reached 89.7 sextillion, Zimbabweans had long abandoned the worthless Zim dollar for the US dollar and other currencies, most notably the Rand and the Pula.
Nevertheless, for a while Government continued to criminalise the use of foreign currency in regular transactions. Attempts to force retailers to trade in the worthless Zim dollar resulted in basic commodities disappearing from the shelves.
Locally manufactured products such as sugar, milk, margarine and Mazoe, among others, resurfaced in neighbouring countries where currencies were more stable. It was not until 2009 that Government finally realized that it was wrong, and the people of Zimbabwe were right in abandoning the worthless Zim dollar for more stable currencies.
When Government adopted the multi-currency system basic products resurfaced on the shelves. Zimbabweans didn’t have to go to neighbouring countries to purchase anything and everything anymore.
Even though production remained low, the economy stabilized.
This was largely because of the Inclusive Government that was put in place in February 2009, with Tendai Biti as Finance Minister.
Tendai Biti preached fiscal discipline and restored some confidence in the economy.
However as the economy was beginning to show signs of recovery under the Inclusive Government, ZANU PF began calling for an election, arguing that decisions were difficult to make under the Inclusive Government.
Against the advice of the Southern African Development Community and against the wishes of the Zimbabwean people who felt the then current political settings gave them a breathing space from the deadly perennial election mode, ZANU PF declared a general election set for July 2013 which, as predicted, was hotly disputed.
When ZANU PF regained control of Government it started talking of introduction of the Zimbabwe dollar. This was largely disapproved by the citizens who feared a return to the hyperinflationary years of 2000-2008.
It also vindicated the wisdom of the Zimbabwean people who felt the Inclusive Government was the best foot forward as it eased political tensions and allowed the economy to breathe.
In December 2014, ZANU PF introduced the bond coins, arguing they wanted to ease change as the country did not have USD coins. Whilst the argument made a lot of sense, economists warned that this move marked the backdoor return of the Zim dollar.
Government flatly rejected that it was bringing back the Zimbabwe Dollar.
The bond coin was followed by the introduction of Bond Notes in November 2016 through Statutory Instrument 133 of 2016. Zimbabweans were unanimous in rejecting the bondnotes, but Government went ahead anyway.
If a referendum was to be held on the bondnotes, it was most probably going to be rejected by 99.999999% of the Zimbabwean people. The Reserve Bank of Zimbabwe had to concoct a plethora of promises and falsehoods to persuade the people to accept the bond notes that were fictitiously pegged at 1:1 to the US Dollar. The RBZ Governor John Panonetsa Mangudya even promised to resign if the Bond Note failed to resuscitate the economy.
US Dollar Disappearance
The US dollar began to disappear from the system as ZANU PF raided the Central Bank and commercial banks, harvesting all the forex in the country and replacing it with the Bond Note which could only be traded locally.
Zimbabweans were cut off from the rest of the world.
Automated bank cards were disabled from performing transactions with entities outside Zimbabwe. Those who needed United States Dollars were asked to apply to the RBZ and as predicted, the facility favoured the ZANU PF – military cartel.
Again, Zimbabweans in the diaspora responded by sending money though Western Union or Mukuru as they avoided banks where their hard-earned cash would be morphed into bond notes before it reached their loved ones.
Re-emergence of the Zim Dollar
Now the just-announced banning of the multi-currency system sounds all too familiar given ZANU PF track record of doing things without consulting the Public.
As has been happening in the past, anything done without consulting the people will be rejected outright and people will find ways and means of circumventing it till Government admits that the policy is not working.
In the meantime, most shops will struggle to re-stock using RTGS / Bond notes as the majority of products are imported from South Africa.
Basic commodities will disappear.
Zimbabweans will continue to trade with one another using the multi-currency system whilst the actual value of the RTGS Dollar will be decided by street economists at Fourth Street.
The situation in Zimbabwe will begin to turn only IF Government begins to value the opinions of the Zimbabwean people.
In fact, Zimbabwe can transform on the political and economic front when politicians start to have a two-way communication channel with the citizens.
This outdated top to down communication approach by the Zanu PF Government has proved in the past that it will not work even when coercive tactics are applied.
The Government needs to stop reinventing the wheel and learn that unilateral promulgation of statutory instruments and policies will ensure a fast return to the hyperinflationary past.
Ultimately this can easily lead to political instability.
The level of disgruntlement in Zimbabwe places the country at a high-risk of civil unrest or even a military coup as security forces are not spared the effects of the economic collapse.
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