WITH the hullabaloo that preceded the introduction of the new currency, one would have thought Zimbabwe’s economic fortunes were finally turning around — a situation which I believe is long overdue given the amount of suffering we have endured at t
he hands of those in power.
But alas, it seems we were already salivating for the hare that is still in the bush.
With the dust still in the air and a long way from settling down, the speculative tendencies which the governor had been trying to curb quickly raised their heads once again with retail stores increasing their prices by large margins as scores rushed to try and offload the fast-expiring old bearer cheques.
Even the appearance of the “learned” governor in Harare streets bullying Asians and threatening unspecified action on those who dare raise the prices of their commodities proved fruitless to stop the tide.
So why introduce this new currency when it has done absolutely nothing to curtail inflation? Why waste valuable resources in the printing of this currency instead of fighting the real causes of this scourge called inflation?
Only for the sake of convenience in putting a few notes in my pocket instead of carrying a bag full of useless “Zimkwachas”? Surely this government must care a lot for us to do such an ingenius thing!
Doesn’t anyone in the top echelons of power realise the real reasons for the 1 000%-plus inflation figure? Basic “O” Level economics tells you that printing money without a corresponding increase in the level of production is inflationary. This is where all the problems we are facing are coming from.
We simply need to produce, be it agriculture, mining or manufacturing. Without that, no amount of public posturing and blaming imaginary enemies who have never set foot in this country is going to help.
We destroyed commercial agriculture ourselves and it is up to us to get it up and running once again. And now we are also going for the mines. God help us!
The only upside of this currency change has been the tumbling of rates on the parallel market as dealers no longer have the cash to buy the forex, leading to a buyer’s market which obviously is only temporary given the inflation levels in the country.
Before those at the top start patting themselves on the back for a job well done, they have to realise that sooner rather than later those forex dealers will have their hands on the new notes and the rates will shoot up once more with the effects of the slide all glaringly clear to the public.
The solution to this forex quagmire is also the same as that to inflation. Produce, produce and produce! Without that, we are doomed.
One wonders why the Reserve Bank is shouting “sunrise” at every turn when it’s clear that there is no sunrise to talk about. All the problems of cash hoarding and parallel market activities, which they are battling to curb, are likely to resurface in the near future.
This is because in a hyperinflationary situation people lose confidence in the banking system as their monies will “rot” there without accruing significant interest resulting in them holding on to their cash for speculative purposes. People will seek to hedge against inflation by investing in non-monetary assets and stable foreign currency.
How the governor and those in power plan to curb these speculative tendencies without dealing with inflation first remains a mystery. Removing zeros obviously is not going to do it and nor will reducing money supply because the demand for cash will not recede.
Lastly, where the hell is Morgan Tsvangirai when all of this is going on, I wonder?