Zimbabwe, a nation thrown in the deep end

THE unremitting cash crisis, even in the aftermath of the newly-introduced bond notes, has further thrown Zimbabweans in the deep end, with the period of last week carrying striking semblances with the scenes that characterised the anguish of 2008.

Source: Zimbabwe, a nation thrown in the deep end – NewsDay Zimbabwe December 6, 2016

guest column: LEARNMORE ZUZE

Then, that economic disaster led to the ill-fated Government of National Unity (GNU), which, nonetheless, brought about shortlived economic stability.

While the agonising year of 2008 saw the massive production of prodigious amounts of the worthless Zimbabwean dollar, the current scenario has thrust Zimbabweans in a quandary: The United States dollar has become depleted and, worse, the much-hyped bond notes have failed to ease the cash crisis.

The early signs are not looking good at all. Already, for some nebulous reasons, some service stations have run out of fuel.

And, by now, most Zimbabweans fully appreciate the repercussions of the shortage of fuel in any country. Fuel is a major determinant of many things, including prices of commodities.

Some service stations have also dealt a giant blow to the much-hyped use of plastic money by turning away motorists intending to use bank cards.

This, naturally, has left motorists, including ordinary people, in an almost impossible situation, where they are stuck with vast amounts in bank accounts with no option of retrieving the money for use.

On the other extreme, the American currency used locally is fast disappearing from circulation, a situation evinced by the awarding of $50 amounts by many banks, comprising bond coins and a single $10 note.

Within a week, the banks had run out of both currencies. The surrogate currency hardly looks like the object to stabilise the liquidity situation in the country, as queues have become longer after its introduction.

Zimbabweans, resultantly, are caught between the Dead Sea and the devil.

The suffering in the country continues to creep towards frightening levels, with long, winding queues seen in Harare amid silence from the central bank.

Whether bond notes are an economic experiment or an act of desperation by a cornered administration, their feeble introduction could easily prove to be the chief bank’s most egregious mistake.

The speculation and suspicion by the sceptics is slowly being vindicated.

Further, that there is reluctance to reveal where and by whom these notes are being printed does little to aid to the government’s cause.

The government has operated furtively in the run-up to the introduction of the bond notes, choosing to have everything shrouded in secrecy.

This reflects badly on a government required by the Constitution to make public any instruments that entail the contraction of public debt.

While the government had assiduously laboured to have the nation embrace the surrogate currency, it is apparent, on the ground, the situation is grim, sapping away all confidence.

Bond notes are certainly not stimulating confidence in the long-suffering Zimbabweans.

What the nation has gone through in the brief stint of last week indicates that bond notes may, after all, have a pernicious influence on the transacting system.

I will not belabour what is there for all to see (the inefficacy of bond notes), but it must be harped on that the government, at this juncture, would be wise to realise the truth in the economic argument that bad money drives out good money.

Zimbabwe may be headed again for turbulent times if the Reserve Bank of Zimbabwe remains headstrong. This needs no prophecy.

The country is going back to the same spot where productive hours were lost in queuing for paltry amounts at the banks.

Zimbabwe is marching towards that epoch when indolence, chicanery and unscrupulous dealings were promoted and glorified.

Even more, the imminent wave of hardships is sure to trigger a fresh exodus, robbing the country of its best brains again.

As things stand, Zimbabwe has lost massive talent numbering millions to foreign countries because of its unending crisis since the turn of the century.

The last exodus was at the height of the July 2015 labour ruling, which led to serious job carnage, as companies capitalised on the judgment to fire thousands of workers.

Slowly but surely, Zimbabwe is becoming an uninhabitable place economically. The disastrous policies wrought by government like the Indigenisation Act will not at all help matters.

The obtaining situation in the country is hardly the propitious time to be scaring away the much-needed investor by such policies.
Thrown in the deep end and with little option, Zimbabweans are likely to flock towards hostile borders for the umpteenth time in their thousands. This government has failed its citizens.

What is more disturbing, though, is the obstinacy with which such a failed system of governance continues to cling onto power and to crush dissent.

Zimbabweans have surely been thrown in the deep end; any little protest to the system has surely been met by brute force.

Many have been maimed and killed simply for holding contrary views.

There are two things for Zimbabwe: It’s either this great nation continues under near-slavery; or wakes up to its true self and demands good governance.

Otherwise it’s an eternal commitment to poverty and servitude.

Learnmore Zuze writes in his own capacity. E-mail: lastawa77@gmail.com

COMMENTS

WORDPRESS: 3
  • comment-avatar
    nelson moyo 5 years ago

    Sir Thomas Gresham’s ( 1519-1579) law of currency is about to be tested in Zimbabwe :–
    Gresham’s law states that any circulating currency consisting of both “good” and “bad” money (both forms required to be accepted at equal value under legal tender law) quickly becomes dominated by the “bad” money. This is because people spending money will hand over the “bad” money rather than the “good” ones, keeping the “good” ones for themselves. Therefore the bad money (bond notes) will drive out the good money(US dollars) and a US dollar will become extinct inside Zimbabwe.
    To summarise – In Zimbabwe a US dollar and a soon to be issued ZW Bond note are equal value according to the Reserve Bank of Zimbabwe and Doctor John ‘Bond’ Mangudya.
    The market place of Zimbabwe and the world are about to be tested to see if GRESHAMS LAW of CURRENCY is still valid after 400 years

  • comment-avatar
    Morty Smith 5 years ago

    Greshams law is always valid.

    ZANU has deep in its culture an understanding that violence and intimidation will always win the day. They are at an absolute loss in the economic realm where these tactics actually achieve the reverse of the intended result. They simply cannot understand it. This lesson has been given to them over and over again and still they have not learned. Their leader is the slowest learner of them all.

    • comment-avatar
      nelson moyo 5 years ago

      But the dear leader of Zimbabwe has 6 degrees and is possibly the cleverest person on the African continent.
      Even the United nations has reported that Zimbabweans are the most educated in Africa.
      Pity the rest of Africa then !