Zimbabwe scrapped the Z$ in November 2008 and introduced the basket of
multi-foreign currency for one very good reason - it had become impossible to
do business in Z$. Because of the hyperinflation, the Z$ was losing it value
exponentially and so the price of good and service in Z$ were following suit.
So price doubling every year in 2000, in 2004 they were doubling every month
and by 2008 with inflation now a record 500 billion% prices were doubling every
hour.
By 2008 the shop shelves were empty and most industry had closed shop because
no one in their mind would accept being paid in Z$ when as soon as the
transaction is concluded the amount so received is not enough to buy back the
same item. “Z$ raora!” (Z$ is rotten!) people said and no one wanted to be paid
in a rotten currency.
Indeed by 2008 the only meaningful business trade taking place in the
country was paid for in foreign currency directly or indirectly. It was common
to buy fuel coupons in SA, pay in Rands, and claim the fuel in Zimbabwe for
example. Government itself was allowing so businesses to trade in foreign
currency.
Those who had no choice but to accept the rotten Z$ suffered greatly.
Wages, pensions, savings, etc. are very static, they are reviewed once a year,
if at all; and so they are always lagging behind. Many Zimbabweans were forced
into a life of abject poverty as their pension and savings became worthless
given the hyperinflation.
So, by the time the regime finally scrapped the rotten Z$ in 2008, it
was doing what it should have done a long, long time ago!
It must be said that it was government’s voodoo economic policies that
had fuelled the hyperinflation, it was the regime that had caused the rot of
the Z$. It was typical of this Zanu PF dictatorship to cause the rot of the Z$
and then impose the rotten currency on a helpless people.
Zanu PF has rigged elections denying the people a meaningful say in the
governance of the the country and helpless to do anything to oppose the
regime’s dictates. The party rigged last year’s elections and now it is
scrapping the stable foreign currencies to bring back the rotten Z$!
“Finance Minister, Professor Mthuli Ncube has said that the Zimbabwean
dollar was reintroduced to cushion workers who are now failing to access basic
commodities as shops were charging in foreign currencies,” reported Spotlight
Zimbabwe.
“Ncube said that he met with an Association of teachers which lamented
over their inability to buy basic commodities from shops and medical facilities
which were pricing their goods and services mainly in US dollars. Most workers
in Zimbabwe are paid in the local quasi-currency, the Real Time Gross
Settlement (RTGS).”
Of all people, Finance Minister Ncube knows that the RTGS$ has been
losing its value. In January it was on par with the US$, today, six months
latter it is trading at 6:1 at the official rate and 10:1 on the black market.
Inflation has surged up to 100% and prices and doubling every month. There is
no denying that the RTGS$ has the same rot of the Z$ of 2008!
Scrapping the stable foreign currencies only means the country is back
to the bad old 2000 to 2008 years of doing business with a rotten currency.
Imposing the rotten currency will cushion the workers or anybody; it will make
life even harder for those who can circumvent the trading difficulties and
impossible for the many forced to use the rotten currency.
Zanu PF has done nothing to repair the damage inflicted on the national
economy by the decades of gross mismanagement, rampant corruption and the
lawlessness earning the country the pariah state tag. The scrapping of the
stable foreign currency to impose the rotten Z$ is just one of the many
blunders the regime has made this month alone; it is not done yet, there are
plenty more blunders to come.
The only reason the party has remained is power all these last 39 years
regardless of its track record of failure is because it rigged elections. We
are a nation caught in a trap and unless we do something to stop Zanu PF
rigging elections, there is no escape.
Where was your "patriotic sense" when you and your fellow MDC leaders failed to implement even one democratic reform in five years during the last GNU? We would not be in this mess with Zanu PF still in power and blundering from pillar to post.
ReplyDeleteYou do not need a degree in economics to know that it is better to have a stable foreign currency than an unstable, rotten local currency! It is stupid to evoke patriotism where it is uncalled for. At the height of the hyperinflation in 2008 many people were suffering and many died because all economic activities had ground to a stop because it was impossible to do business in a country whose currency was losing its value by the hour, prices were doubling by the hour. So you thing we should have continued trading in the rotten Z$ regardless in the name of patriotism?
In need to overhaul our corrupted political system if we are ever to get rid of these corrupt and incompetent Zanu PF thugs complete with the entourage of equal corrupt and brain-deam opposition sell-outs like Obert Gutu!
Zimbabweans cannot allow themselves to be dragged back to the nightmare years of hyperinflation and be forced to use the rotten Z$. It is government's responsibility to make sure the country has a stable economy and stable local currency; this Zanu PF regime has failed to do this. If the local currency is unstable it is not surprising that people would prefer to trade in stable foreign currency and it is not too much to ask that they should be allowed to do so.
ReplyDeleteThe ZCTU demos to demand that people be allowed to use foreign currency makes sense!
At the heart of Zimbabwe's economic meltdown and political chaos is the failed political system that has stifled debate, democratic competition and denied the ordinary people their freedoms and rights including the right to a meaningful say in the governance of the country and even the right to life. To Mnangagwa and his Zanu PF thugs truths, reality and reason count for nothing in the regime's single minded pursuit of absolute power and the influence and wealth it brings.
ReplyDeleteThe decision to re-introduce the Z$, like so many other Zanu PF decisions, was a political decision and had nothing to do with truth, reality and reason.
If we are serious about ending Zimbabwe's economic meltdown and all the human suffering and deaths it has brought then we must dismantle the dysfunctional political system that has allowed those in power to impose voodoo economic policies that defy all economic laws and even common sense!
@ Zwelithini Nkululeko Mbazo-Nyathi
ReplyDeleteBy 2008 most Zimbabweans had lost their business, savings, everything because of the runaway hyperinflation that peaked at 500 billion%. The country’s economy has never recovered from that traumatic experience and now it is being forced to go through the same ringer yet again.
The country should have either changed course to stop the runaway inflation or scrapped the rotten Z$ as soon as inflation hit the 50% mark.
Today, Zimbabwe is the poorest nation in Africa and millions of our people now live in abject poverty. Some people want to tell us sticking to the Z$ regardless of its rottenness is being patriotic; it is being foolish, to say the least!
@ Rugeje
ReplyDelete“For the past 20 year + there have been currency reforms and in each reform the nation is told it is done to stabilize the economy but with huge surprise none of many reforms have brought meaningful stability, So what is it that will work for Zim under ZANU government?”
Could not agree with you more! The truth is Zanu PF has no clue what to do to revive the country's comatose economy, it will not admit it has no clue and so the nation has been dragged from one blunder to the next. Sometime the nation is dragged into repeated the same foolish blunder again and again as is the case here.
A responsible and competent government will come up with economic policies to deliver economic growth and stability; Zanu PF is NOT one such government and hence the reason for the 39 years of economic turmoil and chaos. Forcing the nation to use the rotten Z$ in 2000 to 2008 when inflation peaked at 500 billion % was not just foolish is was high treason because it destroyed the nation’s economy and forced millions in abject poverty from which the nation has struggled to recover. Forcing the nation back into those nightmare years once again is criminal insanity.
Zimbabwe is stuck with a corrupt and incompetent Zanu PF dictatorship. The nation should know by now, after 39 years of the same rubbish, not expect any sensible policies and economic recovery. If we are serious about ending the economic meltdown then we should focus on getting Mnangagwa and Zanu PF to step down so we can finally implement the reforms necessary for free, fair and credible elections.
As long as Zanu PF remains in power this country is set to sink deeper and deeper into the abyss!
The Zimbabwe Congress of Trade Unions has rubbished statutory instrument 142/19 and warned that workers are ready to engage in mass action if the government doesn't reverse the decision to ban the use of foreign currency.
ReplyDeleteIn a press statement held in Harare on Tuesday ZCTU said, "With impunity and no sense of shame, the government is shying away from responsibility for the destruction of the local currency in the first instance and now the multi-currency system that it inherited from a functional state of the GNU in 2013.
The monthly inflation rate in Zimbabwe is already 80% in other words the RTGS$ or new Z$ will lose half its value every six weeks! No one should ever be forced to accept such an unstable currency as legal tender! No one! If this Zanu PF regime cannot come up with economic policies that result in a stable local currency then the least the regime can do is allow the people to use stable foreign currency as legal tender!
Millions of ordinary Zimbabweans are living in abject poverty today because their businesses, savings and everything were wiped out during the last hyperinflation years of 2000 to 2008. ZCTU is 100% right in demanding that people must be allowed to trade in a stable currency. It will be insane to allow the regime to drag the nation back into those nightmare years once again!
@ Tshabalala
ReplyDelete“Which country in the world uses foreign currency in their land? don't you think removing US$ is ending of uSiphatheleni and Cash Hoarders, although this Cash Hoarding need to be dealt with severely. Those who are holding foreign currency should open Foreign Accounts or change it using the legal channels . Are you calling for demonstration for Regime Change? Please don't be reckless. Mthuli has reapplied the law which was there during the Smith Regime the same law which lives in every country, remember this was changed by zanu pf to promote their corruption.”
You have missed the point completely. The question is would you accept to be paid in a currency that is losing its value so fast, at 80% monthly inflation rate (growing exponentially), that every six weeks it loses half its value? Or would you prefer to be paid in a currency that is stable, at 5% per annum inflation rate, it will take two decades to lose half its value?
If you chose the currency that is losing half its value every six weeks then you have no economic sense none common sense! You clearly have no clue what inflation means and are just a blundering fool.
The hyperinflation of 2000 to 2008 which peaked at 500 billion % destroyed the Zimbabwe economy and forced millions into abject poverty from which many have yet to recover. To suggest that was acceptable in the name of patriotism of using Z$ is madness!
The only people who benefited from the hyperinflation of 2000 to 2008 are the corrupt and tyrannical ruling elite who had access to the foreign currency at the super low official exchange rate and then sold the same forex at the inflated black-market rate. The ordinary Zimbabweans were forced to sell all their forex at the low official rate. No ordinary Zimbabwean in his/her right sense would want to be fleeced again!