Eric Bloch Column

Government has no shortage of scapegoats

mso-fareast-language: JA”>AS is known to all, Zimbabwe is a country which by now is possessed of very little other than shortages. Petroleum products have been in short supply for more than six  months, notwithstanding that when they first occurred government tried to convince the populace that the scarcity of fuel was of a very temporary nature, and that the situation had been occasioned by the malevolent acts of others, in no manner related to  government’s management of the economy.

Basic foodstuffs, essential for the nation’s wellbeing, are in short supply. Virtually the only maize meal in the country is that provided by humanitarian food aid programmes which, despite the very considerable generosity of donors, at the very best meets half the minimum needs of the populace. Similarly, bread supply is very limited. Of course, government claimed that it was in no manner responsible for the national food distress. First it attributed the shortages to the malicious failure of the white farming community to deliver crops to the Grain Marketing Board. Government did not explain how it would have been possible for white farmers to do so when they had been forcibly evicted from their farms, in some instances before crops could be planted, and in other instances before the crops could be harvested.

Of course, white farmers had demonstrated themselves — over more than a hundred years — to be so innovative, constructive and productive that mere forced eviction should not have precluded their providing for the nation’s food requirements! When the allegations against the white farmers proved to be devoid of credibility, government changed its tune. The lack of food production was due to the drought conditions which had afflicted Zimbabwe!

When it was brought to government’s attention that much of Zimbabwe had such extensive water storage resources through a widespread network of dams, that, therefore, many farming districts could have grown the maize and wheat needed to feed Zimbabwe, it once again sought to escape culpability by accusing the former white farmers of victimising the nation by removing their irrigation equipment. That the farmers had been deprived of almost all they possessed, and that most of them had to realise their few remaining assets, including irrigation equipment, to pay retrenchment packages to workers, legislated after their farms had been taken from them, was irrelevant. Once again they were held to be responsible for the nation’s starvation.

However, when government was — with the  effluxion of time — criticised for not having resolved the alleged non-availability of irrigation equipment and of agricultural inputs and  thereby causing inadequate food production, it responded that there had  been more than adequate production but that white-owned companies had  acquired vast quantities of maize meal and flour and were guilty of   hoarding it. Once this was proven to be spurious, government reluctantly acknowledged the inadequate volumes of production, but subtly implied that the scarcity was only a transition syndrome, soon to be remedied by massive escalations in GMB prices and by state provisions of inputs (yet to be evidenced to any material extent on the part of government). 

Presumably, as the next season approaches, the president, the Minister   of Land, Agriculture and Rural Resettlement and others are mouthing  daily prayers for another drought to absolve themselves of any  blame.

Sugar, too, is in short supply. That this was in part the result of irrational price controls only recently removed, and to a major extent because of state-driven expropriation of sugar fields for the production of minimal quantities of winter maize was irrelevant. So too was the fact that much of Zimbabwean sugar was being purchased by known members of the ruling party at the controlled prices, for illicit export. No, according to the state propaganda machine the scarcities were due to deliberate withholding of supplies by traders to force revision of prices and due to hoarding by the affluent.  

When this soon lost its credibility, the propaganda machine crawled into a shell of silence to ponder upon whom next to blame. 

The most recent shortage has been that of $500 bank notes. All rational persons accepted the credibility of the Reserve Bank explanation that market requirements for the notes had increased as a direct result of rampant hyperinflation which is by now Zimbabwe’s most unique characteristic, compounded by the cash requirements of black market currency traders, and exacerbated by the inability of the Reserve Bank to print the bank notes, although it had planned to do so. Immediately, the Reserve Bank and its governor received unfettered abuse from government and the more vociferous members of Zanu PF. They castigated the governor (who was indisputably the best Zimbabwe had had since Independence) for allowing the crisis to occur. The fact that the crisis was not of the making of the Reserve Bank and its governor was of no import. Someone had to be blamed, and who better to blame than the evil Reserve Bank and its governor.

The fact that the Reserve Bank was unable to print the needed bank notes because government had directed that all available foreign currency be used to fund imports of fuel, food and energy, and pay presidential travel costs, instead of payment for security bank note paper and inks was irrelevant. Someone had to be blamed, and the Reserve Bank was a prime and credible target, as it was the responsible authority for the provision of bank notes even if government had usurped that authority with its ongoing reluctance to provide the central bank with the autonomy and independence necessary for effective monetary policy management.

However, after government had manipulated a premature, two-month ahead of schedule departure of a very capable governor, the bank note shortage not only continued, but intensified. Government was faced with a critical situation. Its unfounded attacks upon the Reserve Bank and Dr Leonard Tsumba were proved to be bogus. In fear that the truth may be exposed, showing the culprit to be government itself through its shambolic handling of the economy and its devious manipulation of monetary policies, a new target for blame was urgently required. Having had many years of experience at creating mythical targets to be accused of anything that would otherwise be directed at government, the Minister of Fiction, Fable and Myth and his propaganda infrastructure had no difficulty in exposing a new, supposed cause of the bank note crisis.

Disregarding all its previous allegations against the Reserve Bank, the state media proclaimed that the massive shortages of bank notes  was due to “some large companies and corporations hoarding cash”. The state’s television screened pictures of bank notes in the custody of security companies, ignoring that it is normal practice for major retailers to use such companies to convey their cash from their many branches to their bankers and, pending banking, to hold the cash in a secure environment.

The necessity for such security has increased as Zimbabwe has steadily fallen prey to increased lawlessness, with the state unable or unwilling to enforce law and order.

Other businesses have increased their holdings of cash substantially. They have not done so for untoward reasons, but in recognition of the potential non-availability from the banks of the cash when required to pay wages or for other normal business purposes. But because of the cash shortage crisis and its repercussions upon the economy and upon all sectors of the populace, this is not acceptable to the authorities.

Although there is no law directing the banking of cash or release of cash into the economy, and although the accumulation of cash has been driven by sound business strategies to address the consequences of bank note shortages, those in power blame commerce and industry because they need to blame someone to divert attention from themselves.

Only last week the chairman of the Parliamentary Portfolio Committee on Budget, Finance and Economic Development, David Chapfika called for a review of laws governing the circulation of money, saying: “It is preposterous that companies should be hoarding cash at a time when there is such a shortage. That is an act of sabotage … if someone is keeping the money for purposes of sabotaging the economy, then I think there is need for legislation to deal with that.”

This is sheer paranoia. Those holding cash do not do so to sabotage the economy, but to assure their own continuing operations and address the needs of their employees. Government needs to recognise and address causes, and not symptoms. It needs to achieve economic recovery, in which even shortages will become history instead of the over-riding feature of daily life.