Mr Eddie
Cross, everyone who has read your many articles ever since the November 2017
military coup that ousted the former Zanu PF tyrant, Robert Mugabe, to be replace
by Emmerson Mnangagwa knows that you are one of the latter’s cheer leaders. Still,
this is no licence for your to falsify historic facts in you defence of this
Mnangagwa regime.
“The real
target of these measures (SI 142 and return of Z$) was the exchange rate. This
was not an issue when we were living in a fairy tale land where the RTGS dollar
and the Bond Note currencies were accepted as being 1:1 USD,” wrote Eddie Cross.
“But when
the Minister of Finance in October 2018 announced the obvious to all and
sundry, that there was no relationship between what are local currencies and the
US dollar, we all went into panic mode.
“We are
strange creatures – the Reserve Bank Governor was saying – ‘no, the Bond is not
a currency and it is on a par with the US dollar’. We accepted that fiction
because we could not imagine what would happen if this were not so. We all had
piles of the stuff in our bank accounts and felt rich!!”
This is not
the first time the people of Zimbabwe are being blamed for the 1:1 exchange
rate between the Bond Note and all the other local currencies that have
followed. People like Eddie Cross are forgetting that it was RBZ under
instruction from the Minister of Finance and government that stipulated what
the starting off exchange rate would be, fixed or float, etc. It was up to the
relevant authorities to change the exchange rate at any given time. And so the
very suggestion therefore that it was us, the people’s fault the exchange rate
was ever fixed at 1:1; is insulting and mischievous.
The exchange
rate was adjusted in February to 2.5:1 and allowed to float. Just before IS 142
on Monday 24 June was announce the RTGS$ was trading at 6:1 on the interbank
rate and 8:1 on the black market. One does not need a degree in Economics see
the local currency was losing its value against the foreign currencies.
Minister
Mthuli Ncube started talking of the need to introduce a fully fledge local
currency as far back as November last year. "We have to choose an option
that is credible, that is sustainable and that is least costly, both in terms
of time administratively and in terms of time building reserves. There is a
cost to introducing a currency; so you have to evaluate all of this. But before
you do that, sort out the fundamentals," he said then.
In April
2019 he told the IMF and WB officials that the new currency would not be
introduced for “say 12 months”. President Mnangagwa said the new currency would
be introduced “by the end of the year” but not before the “economic
fundamentals to ensure its stability were in place”.
The
following week SI 142 was enacted, all trade in foreign currencies was receded,
just like that! Of course, the regime had done nothing to implement the economic
fundamentals such as the reviving of the local economy to increase local
production to ease demand for foreign currency by reduce imports and increasing
export earnings.
In short,
the regime could no longer wait to get the fundamentals right, it panicked, and
banished local trade in foreign currencies to easy pressure on RTGS$ that had
already lost ground from 2.5 to 8:1 to US$.
Banishing
trade in foreign currency will reduce economic activity because being paid in a
local currency that is losing its value will make business activities a
hell-lot more risky. The empty shop shelves of 2008 are back.
“The real
target of the impose Z$ is exchange rate!” Nonsense! How can we do away with
exchanging Z$ for foreign currency when we import 70% of our needs. Worse
still, since we import far more that we can pay for from our export earnings
the local currency will suffer inflationary pressure.
“A currency
is simply a means of exchange and used for the accumulation of wealth and as a
store of value – nothing else. The stuff we are using as an electronic means of
exchange, the so called RTGS dollar, was just the electronic version of the
real thing,” explained Mr Cross.
Correct, and
if the supply of the currency exceeds the value of the goods and services on
market the value of the currency will fall. We all know that is exactly what
has been happening in Zimbabwe.
One can say
the local currency is suffering the double effect of local and foreign exchange
rate inflationary pressures. The Z$ is being “burnt” from both ends and it is
the regime to blame for this, not the people!
@ Simba
ReplyDeleteEmmerson Mnangagwa is already falling on his own volition, if you try to assist the push, you will be blamed by the corrupt SADC/ AU leaders whose backing you need for any revolution to succeed.
Court cases, battles and revolutions are sometimes lost not because the case, army or cause was weak but because the lawyer, general or revolutionary leader was incompetent.
It is all very well calling for a shutdown but people need to know and agree what it is the shutdown is meant to achieve. We have a regime of trigger happy thugs and this will be a long fight if people are going to make the necessary commitment they must be convinced it is all worth while.
Officials at the Registrar General Office told AFP that even if citizens want to pay for an urgent application for a passport, they face a minimum wait of 18 months before they can even submit their papers.
ReplyDelete"Last month, the urgent applicants were being told to come back at the end of 2020," said one official who spoke to AFP on condition of anonymity.
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
The Second Coming by W B Yeats
Well things are certainly falling apart in Zimbabwe, the centre cannot hold and anarch is ruling the roost. Mnangagwa and his cronies have failed to govern but that is not to say they will ever admit they failed much less give up power.
Indeed, whilst they know that they have failed, even they cannot be blind to the consequences of their failure, the economic hardships they see only serves to harden their own resolve to stay in power for fear they too will be swept away in the growing tide of abject poverty. Many of them have looted and even shed innocent blood in the drive to secure power; they only sure way of keeping this past secret is for them to remain in power. And so, they are hanging on to power with the desperation of a binnacle superglued to a rock.
When Mnangagwa took over from Mugabe in November 2017 he did hit the ground running with his "Zimbabwe is open for business!" People thought he was a man on a mission and knew exactly what had gone wrong throughout Mugabe's years and was going to fix it. Now 18 months later, it is clear he had no intention of changing Zimbabwe from the pariah state ruled by corrupt and vote rigging thugs. His claim of the country being a new dispensation, a democratic Second Republic, was all bluff. Investors and financial backers have all shied away from injecting the much need new investments to kick start the comatose economy. No one wants to do business with thugs!
ReplyDeleteMnangagwa has given up on the plan to revive the economy to concentrate on his plan B - keeping his iron grip on political power by the use of brute force, the tried and tested method Zanu PF has relied on these last 39 years! Yes the Zimbabwe economy is swiftly sliding into the abyss and Mnangagwa is ready and waiting to beat and even kill anyone who dares to protest against the economic meltdown.
We have an illegitimate regime that rigged the last elections confident that it will rig economic recovery but has since failed. The worsening economic situation is causing untold human suffering and deaths. The regime will not admit it has failed just as it will not admit it is illegitimate and, worst of all, it has the military might to impose its continued rule. We are well and truly stuck!