CZI is right: Dollarisation is bad for Zimbabwe - Zimbabwe Situation

CZI is right: Dollarisation is bad for Zimbabwe

Source: CZI is right: Dollarisation is bad for Zimbabwe | Daily News

HARARE – It is not a secret that I am not a fan of the current government’s economic policies and choices.

I especially find it reprehensible that they continue to avoid solving the prevailing currency crisis choosing to focus instead on bizarre projects such as building a new capital city- talk about fiddling while Rome is burning.

It seems they are just going to let fate decide to bring back the US dollar. I am, however, not convinced that us using the US dollar as our main currency is a good thing.

I think it’s part of the reason why we are in this mess. Believe me I am not trying to absolve the government of any guilt. They certainly had a hand in landing us in the quagmire.

We see more companies wanting to sell in US dollars, but the issue is that we don’t need dollarisation as an economy. The economy will shrink by as much as 50 percent if we dollarise, so for me it is not the right way to go.

We have seen it with US dollars in the past that we won’t be competitive when using the US dollar.

I am not sure about that 50 percent claim this guy is making.

It seems like a made up number meant to make people pay attention.

“Experts” do it all the time and it’s unlikely this is accurate. If anything any shrinkage will be a result of inflated GDP prices created by the bond note 1:1 exchange rate delusion the government likes to maintain.

I, however, totally agree that using the USD will make Zimbabwean goods expensive in the southern African region where we have weak currencies such as the rand, metical, Namibian dollar (pegged to the rand) and the two kwachas.

Conversely it will make imports from these countries cheaper and with
rampart smuggling ultimately destroy the very small industry that we
have.

It is understandable that people are nostalgic about the short-lived boom that we had  back between 2009-2013.

After a hyper-inflationary period that saw people lose faith in their currency people took comfort in the very stable very widely accepted USD but apart from the fall of the GNU in 2013 something else happened to create the current liquidity crisis.

The rand — South Africa is our largest trading partners in the region — went on a slide.

The result South African imports became even cheaper and people started importing everything and I mean everything. I would go to Mbare and see people selling oranges from South Africa, potatoes from South Africa, clothes from South Africa, drinks from South Africa, rice from South Africa, chicken bits from South Africa, shoes from South Africa. Remember the Twizza craze?

South Africa already has a well developed industry that can make a lot of things cheaper than we can ever hope to, add to that the boost they got as their currency depreciated against the USD dollar and the Zimbabwean industry had no chance.

By the time the government moved in to levy tariffs and ban certain items, the damage had already been done and the industry never recovered.

The fact that former president Robert Mugabe’s government was going ahead with confusing indigenisation exercises did not help.

I know it’s difficult, but it is not impossible, to join the rand Union but this is the reason why I have been an advocate of us taking that route.

It will at least make sure that our local industry is not at a disadvantage merely because of exchange rates. The least the government could do is depreciate the bond a bit otherwise there is zero point in us having a local industry especially given the fact that the local population now has a taste for imported matches and whatnot!

Berate me, but adopting the dollar is not going to change the fact
that we consume more than we produce. It will see whatever little USD
we have being vacuumed by our neighbours. It will not change the fact that we have an increasingly command economy. It will certainly not improve our fortunes. I am afraid.

COMMENTS

WORDPRESS: 8
  • comment-avatar
    Ndebele 6 months ago

    CZI stands for Confederation of Zanu Industroes. They are a Zanu Mouthpiece like Strive. A Mujiba Mouthpiece.

  • comment-avatar

    The author (whose name is not given) makes some good points but does not offer an alternative. If you’re going to criticise, be constructive please!

    • comment-avatar
      Ndebele 6 months ago

      When the GNU was formed ten years ago – the market was dollarised. The country recovered but Zanu lost control. Saying that going to a Dollar (US) economy will be a disaster – this is possibly correct from a Zanu perspective. Zanu will lose its command economy control of the economy. For the people and the country – it is the only way froward. To get the Zanu murderers, rapists and thieves to keep their dirty, thieving, smelly, dollar pickin fingers out of the peoples’ pockets is the first step. This starts right at the top and works its way down the Zanu Patronage Web like the Mafia.

  • comment-avatar
    Bhanditi 6 months ago

    Kudo Ndebele! Zimbabweans have just one albatross around their necks. It’s called ZANU PF the mafia that killed our grandparents accusing them as sellouts, raped and forced them to cook all their chickens and goats (Gandanga haridye derere) 1974-1979. The Willogate mafia, War Victims mafia, Gukurahundi, Murambatsvina, Porta Farm, Land barons, Gono-Mugabenomics, Mangudya-bondnomics,Elections riggings…all desiged to steal, kill and destroy. It’s a blood sucking vampire cartel that will do everything to destroy. Destruction is in ZANU’s DNA, no wonder they raise the fist at every turn, be it destroying bridges or people dying of cholera or theft of diamonds.

    They raise dust whenever there is any semblance of order like the catfish, so they pillage and kill.

    Zanu can never do good for anyone including itself. They have the military support to continue their impoverishment agenda and now CZI and ZNCC have joined in. The people of Zimbabwe never used to accept Zudas. Until ZANU made short work of the local dollar. Now they’re deploying all sorts of ‘experts’ to tell us that they love an industrialised Zimbabwe-while they enrich themselves and search products and services provided by industries abroad!

    • comment-avatar
      Ndebele 6 months ago

      But Zanu now has a New Mega Mujiba – Mega Mujiba Strive. 2019 is the year of the Mega Mujibas – those with money like Donald Trump will automatically be regarded as having genius status and the right to do and say as they please – as long as they support the Dear Leader of the Day, Ncube is a Mega Mujiba. Gideon Gonzo was a Mega Mujiba – and now Magudya wants to be a Mega Mujiba like George Charamba. There is now a whole science of Mega Mujibiology. They write under the title of Opinion all the time and support ED, Chiwenga, Shiri, Mthuli Ncube, Magudya and their hanger on’s every word. Watch the Mega Mujiba Space for an expert opinion on any and every subject – the Mega Mujibas are the equivalent of Zanu Google. The bigger the bullsh..the more Mega the Mujiba.

  • comment-avatar

    Dollarisation was a bad thing in the first place, told my friend in 2009 that it’s like working in a small economy and go buy in America, look at China how they benefit from weak currency. The only purpose to put the $ was to get their stolen money from the banks and keep it in real currency in bags  hidden somewhere in case they is a disaster and no one can recover anything from their bank accounts. And when they did that the problem was how to keep the ZANU machine going, so they came with a good bad plan, Jongwe printers print fake bond notes go buy real cash$ and buy whatever you want without working or any industry needed as long as the printers got ink and for that reason that’s why they keep on rigging elections. The solution is to join Rand monetary union but it comes with 2 problems of its own, 1 is how will the junta survive without Jongwe printers, coz you won’t be able to print rands and their ANC friends doesn’t own SARB it’s partial privatized  and 2 that’s the biggest headache, what happens to us fellow Zimbabwe holding bond notes pegged at 1-1 US dollars, u can not abandon Bond notes without exchange it to real currency, so if there is a trillion in circulation they need a trillion US dollar to replace us for us to throw the fake money out. So whoever thinks Zimbabwe will achieve so fast, remember visions 2020 we were told told late 1998 and now its vision 2030 and soon it will be 2050 and ZANU PF hope is we die and their solution is done.

  • comment-avatar

    If USD no good lets try the Malawi kwacha comrades

    • comment-avatar

      Malawi kwacha is good, I know a lot of Malawian working in South Africa selling boiled eggs in the street and I wonder how would these guy survive or come all the way from Malawi and do such a thing but when I went to Malawi visiting my co-workers one December at a holiday I was shocked , if you got your rands and change it to kwacha, you can buy anything, cheap like so cheap, taxi is equivalent to R1.30 distance of 100km cost something like R21 and everyone owns a house and this ex-jap cars. The weaker the currency the better that’s why most Zimbabweans buy stock and goods in South Africa coz the rand is weaker than the US