Let me say upfront that I admire people like Sten Zvorwadza and all the other of the social media heroes and heroines for their courage and passion in leading street protests from the front. However, I am not entirely convinced that some of these street protests, well intended as they clearly are, are helping us get out hell-hole we find ourselves in but are instead just a rat-race taking us round and round in circles.
Take the issue of bond notes, Sten Zvorwadza has vowed to stage street protests, starting on 18 November 2016, to force this Zanu PF regime to abandon its drive to introduce bond notes in Zimbabwe. An admirable stance but first, we should be absolutely what the protesters are demanding.
Zimbabwe finally scrapped its Z$ in November 2008, in favour of a basket of foreign currency, when it was near impossible to carry out any meaningful transaction using the Z$ because currency was losing its value by the minute. Inflation peaked at 500 billion per cent, a world record; fueled by the country’s economic collapse and the regime’s foolish notion that it can solve all the nation’s economic problems by printing more Z$.
The years of hyperinflation, 2000 to 2008, have crippled the national economy and wiped out many people’s investments. Since the scrapping of the Z$ inflation has dropped to single digit percentage points but scrapping of the Z$ alone was not enough to trigger meaningful economic recovery.
It was Zimbabwe’s failure to revive the economy since November 2008 that is behind the cash shortage and forcing the regime to go back to using local currency. Because local industry had all but collapse by 2008, the country has had to import almost everything. Since we import a lot more than we export our balance of payment has been negative and has continued balloon with time. With a net flow of foreign currency out of the country it was just a matter of time before the country started to run out of cash. We have done just that!
This Zanu PF regime now wants to reintroduce the Z$ (calling it a bond note, does not change the essential element that it is the local currency back) ostensibly to allow local transaction to be paid in the local currency and free the foreign currency to be used in foreign transactions. But since the regime has done nothing to address the underlying causes of our economic collapse we will still need to import and thus the foreign currency hemorrhage will continue.
With unemployment rate sitting at a nauseating 90% plus, it was 80% plus in 2008 and has steady crept up; most people have eked a living by importing building materials, clothes, food - we even import milk – (a sorry state for the nation that used to be the breadbasket of the region) and selling them. We have become a nation of importers and vendors!
Since the regime has done absolutely nothing to revive the country’s economy and thus reduce its dependence of imports the people have three good reasons to fear the reintroduction of the Z$:
a) With unemployment a nauseating 90% and millions now living in abject poverty, vendors sell to those in formal employment and not fellow vendors, the need to revive the economy is now a matter of life and death. By reintroducing the Z$ will free the foreign currency for foreign trade but doing nothing to reduce the need for imports. So reintroducing the Z$ is doing nothing to revive the economy whilst kicking the crunch of the shortage of foreign currency to pay for imports further down the Street.
b) The regime will force the ordinary people to accept the bond note at the official exchange rate and force those lucky enough to get foreign currency to sell them through designated channels at the official exchange rate. If the ordinary people need foreign currency, they will be forced to buy on the black-market at exorbitant exchange rates. Meanwhile the ruling elite will be allowed to buy foreign currency at the low official rates and sell on the black-market at the exorbitant rates. The reintroduction of the Z$ will therefore be big money maker for the ruling elite milking povo!
c) The shortage in foreign currency will bring back the days of empty shop shelves and hit the vendors will pay for the imported goods in foreign currency but force to accept worthless Z$ from their customers because that is all they have.
Last week President Mugabe issued a decree clearing the way for the issuance of bond notes as legal tender using Presidential Powers (Temporary Measures) Act (Chap 10:20).
Alex Magaisa, Tsvangirai’s legal adviser during the GNU, has said decree was illegal because President Mugabe is forbidden from amending a primary law in terms of section 134 of the country’s new constitution.
“Parliament may, in an Act of Parliament, delegate power to make statutory instruments within the scope of and for the purposes laid out in that Act,” states section 134. And goes on to explain that the statutory instrument “must not be consistent with the Act of Parliament under which they are made”. Magaisa’s argument being that the decree not consistent with the existing law.
What Magaisa has failed to appreciate here is that Presidential Powers (Temporary Measures) Act is not a statutory instrument nor was it ever meant to be and reading it, confirms this.
Mai Mujuru has gone to the Constitutional Court with her challenge of the legality of Mugabe’s decree. "As Head of State, he ought to allow Parliament to do its work," she says.
Yes, having to resort to using presidential powers to introduce the bond notes is clumsy but that is not to say it is illegal.
Of course Zimbabwe has every right to issue and use its own currency as legal tender within its national borders. We should be careful that our mistrust of this Zanu PF regime does not go overboard because the regime will ridicule everything else we say and do.
People like Sten Zvorwadza must be careful they do not bland their legitimate and very reasonable demands by listening to confused people like Alex Magaisa and Joice Mujuru who are so desperate for attention and political relevance they will make stupid and baseless claims! Passion and courage are very important and useful virtues but unless they are guarded at all times by reason they are useless and even a curse!