By the 10th of April 2024, Zimbabwe’s new currency—
the gold-backed ZiG had waged a surprise fast, fiscal battle
and gained value for a second straight day , according to the
Reserve Bank of Zimbabwe, thus ascending from 0.2% to 13.50%
to the U.S. dollar. I got a call from my enthused Jamaican brother.
“I told you so, we’re kickin’ the damn dogged ass of the dollar
on our march from volatility to financial liberty,” he crooned
and crowed. It is good to inspire confidence, still, this new kid
on the block has several fierce and furious battles ahead
to throw. Besides, not all of Zimbabwe’s banks have
completely converted to adopt and use the newbie.
ZiG, let us take a SwiG and see the dynamics
and cousins of economics, politics and comics
that brought us to this state of affairs—your birth.
Suffice to say that the financial history of your forefathers
has been less stimulating, if not utterly dreadful and unenviable.
A glimpse into the years 1980-1999 and the economy…
For starters, contrary to partisan government officials’
scapegoating tantrums and tricks in the form and fuss
of persistent, peddled ,tired tirades and frantic taunts
around “illegal” economic freezes and sanctions
that allegedly make their targeted businesses
and the economy not only catch a terrible cold
but also a series of sick sneezes ,vicious vertigoes,
nebulous nightmares and deadly desiccations—
several economists and market analysts squarely attribute
the titanic tumble of the once-robust Zimbabwe currency
from honor to dishonor, authority to obscurity
to a number of causes and developments such as:
the mismanagement of public funds and firms,
the imposition of wage and price controls,
inadequacies in investment, training
and hiring, a usually bloated cabinet
coupled with amplified public spending—
resulting in deficits to fund such outlays,
greed, rampant sleaze and scandals,
populist policies, the execution and effects
of IMF’s Economic Structural Adjustment
programme (ESAP), the DRC War saga,
the unbudgeted War Veterans Payouts,
the chaotic farm invasions and the underutilization
of land and assets. To recapitulate this kind of comedy
of errors, think of a manual titled: How to run down
a country by fumbling with the economy, land and war?
If in 1999 and 2001, inflation was 56.9% and 112.1%
respectively, by 2007 and 2008, guess what?—
it was 66 212.3% and 79 600 000 000 percent!
Chilling figures by any definition or measure.
Year 2009 saw the Reserve Bank of Zimbabwe dump
the Zimbabwe dollar for the U.S. dollar. Hey, what had hit
and come over the touted and tireless patriots’ heads?
Still, did they have a choice at that point in time as
hyperinflation was rioting ,roaring, ruling ,ravaging,
dancing ,dribbling ,drinking, devastating and devouring
the value of the Zimdollar with an avid appetite—
a hurtful hunger that made a lousy louse look bearable,
if not innocent? Prices were doubling up as untouchable,
terrifying tags on a daily basis. For its part in the fiscal chaos,
the reserve bank neither acted like a reserved or aloof overseer—
nor like a state institution whose role is to guarantee low and stable
inflation levels. Its responsibility— or rather its response was irresponsible.
True, the Zimbabwean dollar was harshly inflation-ravaged. It was brutal.
True, it had debilitated by over 80% that year. Confidence was declining.
Correct, the calamitous condition had to be corrected. But how was it done?
It went on a wild, wayward and strange binge of printing banknotes worth …..
one hundred trillion dollars in a woozy bid to halt a crazy and rickety state!
External costs for exports meant that more U.S. dollar notes were hovering
out of the country than those which were flowing in. Snaking and scary bank
queues became the disorder and order of the day. A definite deficit. Cash talk
is that the sight of the U.S. dollar cash had become the thighs of a tortoise.
The Ndebeles proverbially state that: a borrowed plough has no
role/impact/legacy. This is a loud, loose translation that literally
warns one against getting comfy with someone else’s farming implement.
What becomes of one if the owner suddenly decides to demand it back
in the middle of the borrower’s farming activity? What happens to one’s
plans? Jeopardy ensures. Is Africa not generally pushing for and pursuing
home-grown models, systems, solutions, innovations and implements?
By virtue of critical cash shortages, in 2016, the authorities hosted bond
notes which were hyped as having the same value as the U.S. dollar. Did
the bond notes and coins become our homespun monetary panacea? No.
Year 2019
A decade of dollarization came to an end.
There was the delicate demonetization of the dollar.
Did it mark a different and wiser way of doing business?
Did the dirty dancing with the US dollar discontinue?
In practice, did the powerful and affluent ditch it?
Behind the scenes, the diplomatic corridors of power
and posturing, what were they mulling and miming?
US dollar, roller-skate out, don’t dollarize our economy.
We didn’t fight to be financially or politically dominated
again. No. We are revolutionaries, we won’t normalize,
sanitize or baptize that abnormality. Unitize fairness.
Is that not level-headed? Is that too much to ask?
Don’t dare teach us values, lecture us to democratize
when you popularize and lionize your hegemony. No.
That deceit won’t work with us. A policy of deceit and
domination. Don’t you know that it polarizes when you
demonize us? Do you expect us to accept and eulogize?
Please realize that as long as you demonize, polarize,
pulverize, pauperize, minimize others, you minimalize
your claims and scope. It’s time to familiarize with equity,
synchronize ways and means for dignity, peace and unity.
It’s time to recognize and harmonize and humanize
global issues, not to personalize and weaponize them.
It’s time to crush, categorize and neutralize chauvinism,
and equalize the playing ground, financially or otherwise.
All the furore was about the dominance of the US dollar.
Did they not use it to conduct business or hire planes?
Did the informal market dump it like a cheeky concubine?
If the basic definition of a currency is something
that is broadly accepted as a means to buy goods
and services, so the Real-Time Gross System
or RTGS was one such form of legal tender? Talk
of money that was electronically transferred into one’s
bank account on “a real time basis” since it sought
to avoid settlement risks or delivery risks, and that the payment
transaction was instant. It was also carried out on “a gross basis”
which means that the transaction or operation was settled
on “a one-to-one basis”, without bundling or netting.
Wind back to October 2023. Fidelity or fickleness?
The Zimbabwe currency is no stranger to man-made
controversies and inconstancies yet it is expected
to miraculously instil confidence in the investors,
buyers and the generality of citizens. Is there faith?
As recent as on October 27, 2023 Zimbabwe’s
government announced that it was set to maintain
its multi-currency system secured by the U.S. dollar,
all the way to 2030. They had previously stated
that the multi-currency system would expire
in 2025. Your guess is as good as mine—
all that lack of consistency and direction
caused uncertainty in the banking sector.
The Reserve Bank of Zimbabwe has a crucial role:
that of creating and enacting monetary policies directed
at ensuring low and stable inflation levels. It is responsible
for the maintenance of a stable banking system. Hence any
action by the same supervisory body that is clearly contrary
to these functions can be deemed and termed as irresponsible.
