The current economic crisis currently faced by Zimbabwe is partly as the results of poor policies by the Reserve Bank of Zimbabwe and the Ministry of Finance. Both the monetary and fiscal authorities are failing to formulate and implement policies which address the currency crisis currently faced by the country so as to pave way for the conducive business environment which attracts investors.
By Ophias Kurauone
It all started in 2016 when the Reserve Bank of Zimbabwe through the Ministry of Finance introduced the US dollar’s surrogate currency in the name of the bond note as a measure of improving the cash crisis and rewarding the importers. The Reserve Bank governor, Dr John Panonetsa Mangundya assured the nation that their deposits and savings were safe and guaranteed by Afreximbank.
Economists and politicians like former Finance Minister Tendai Biti, former Vice President Joyce Mujuru, Fadzayi Mahere and others warned the nation that such measures were going to create a catastrophe to Zimbabwe’s economy characterized by fuel shortages and the black market.
In October 2017, Finance Minister Mthuli Ncube worsened the situation by separating accounts. This created wave of uncertainty and black market emerged stronger. The bond note lost value and the public lost confidence with Zimbabwe’s banking sector. Prices of goods and services skyrocketed at an astronomical leap. Foreign currency dwindled on the formal markets
Not to be outdone, in February 2019, the Reserve Bank of Zimbabwe converted the depositors’ United States dollars into valueless RTGS without their consent. It was one of the biggest fraudulent cases to the people of Zimbabwe.
The people’s foreign currency which they had saved between 2009 to early 2019 was illegally converted into valueless currency. The nation mourned while the Finance Minister Mthuli Ncube was boastful of austerity measures.
Consequently, the confidence crisis is the major problem of the currency crisis currently in Zimbabwe aggravated by speculation and inconsistent policies by both the Fiscal and Monetary authorities as a result of repression by the government.
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