Zimbabwe scrapped the Z$ in November 2008 and introduced the basket of multi-foreign currency for one very good reason - it had become impossible to do business in Z$. Because of the hyperinflation, the Z$ was losing it value exponentially and so the price of good and service in Z$ were following suit. So price doubling every year in 2000, in 2004 they were doubling every month and by 2008 with inflation now a record 500 billion% prices were doubling every hour.
By 2008 the shop shelves were empty and most industry had closed shop because no one in their mind would accept being paid in Z$ when as soon as the transaction is concluded the amount so received is not enough to buy back the same item. “Z$ raora!” (Z$ is rotten!) people said and no one wanted to be paid in a rotten currency.
Indeed by 2008 the only meaningful business trade taking place in the country was paid for in foreign currency directly or indirectly. It was common to buy fuel coupons in SA, pay in Rands, and claim the fuel in Zimbabwe for example. Government itself was allowing so businesses to trade in foreign currency.
Those who had no choice but to accept the rotten Z$ suffered greatly. Wages, pensions, savings, etc. are very static, they are reviewed once a year, if at all; and so they are always lagging behind. Many Zimbabweans were forced into a life of abject poverty as their pension and savings became worthless given the hyperinflation.
So, by the time the regime finally scrapped the rotten Z$ in 2008, it was doing what it should have done a long, long time ago!
It must be said that it was government’s voodoo economic policies that had fuelled the hyperinflation, it was the regime that had caused the rot of the Z$. It was typical of this Zanu PF dictatorship to cause the rot of the Z$ and then impose the rotten currency on a helpless people.
Zanu PF has rigged elections denying the people a meaningful say in the governance of the the country and helpless to do anything to oppose the regime’s dictates. The party rigged last year’s elections and now it is scrapping the stable foreign currencies to bring back the rotten Z$!
“Finance Minister, Professor Mthuli Ncube has said that the Zimbabwean dollar was reintroduced to cushion workers who are now failing to access basic commodities as shops were charging in foreign currencies,” reported Spotlight Zimbabwe.
“Ncube said that he met with an Association of teachers which lamented over their inability to buy basic commodities from shops and medical facilities which were pricing their goods and services mainly in US dollars. Most workers in Zimbabwe are paid in the local quasi-currency, the Real Time Gross Settlement (RTGS).”
Of all people, Finance Minister Ncube knows that the RTGS$ has been losing its value. In January it was on par with the US$, today, six months latter it is trading at 6:1 at the official rate and 10:1 on the black market. Inflation has surged up to 100% and prices and doubling every month. There is no denying that the RTGS$ has the same rot of the Z$ of 2008!
Scrapping the stable foreign currencies only means the country is back to the bad old 2000 to 2008 years of doing business with a rotten currency. Imposing the rotten currency will cushion the workers or anybody; it will make life even harder for those who can circumvent the trading difficulties and impossible for the many forced to use the rotten currency.
Zanu PF has done nothing to repair the damage inflicted on the national economy by the decades of gross mismanagement, rampant corruption and the lawlessness earning the country the pariah state tag. The scrapping of the stable foreign currency to impose the rotten Z$ is just one of the many blunders the regime has made this month alone; it is not done yet, there are plenty more blunders to come.
The only reason the party has remained is power all these last 39 years regardless of its track record of failure is because it rigged elections. We are a nation caught in a trap and unless we do something to stop Zanu PF rigging elections, there is no escape!
12 comments:
Where was your "patriotic sense" when you and your fellow MDC leaders failed to implement even one democratic reform in five years during the last GNU? We would not be in this mess with Zanu PF still in power and blundering from pillar to post.
You do not need a degree in economics to know that it is better to have a stable foreign currency than an unstable, rotten local currency! It is stupid to evoke patriotism where it is uncalled for. At the height of the hyperinflation in 2008 many people were suffering and many died because all economic activities had ground to a stop because it was impossible to do business in a country whose currency was losing its value by the hour, prices were doubling by the hour. So you thing we should have continued trading in the rotten Z$ regardless in the name of patriotism?
In need to overhaul our corrupted political system if we are ever to get rid of these corrupt and incompetent Zanu PF thugs complete with the entourage of equal corrupt and brain-deam opposition sell-outs like Obert Gutu!
Zimbabweans cannot allow themselves to be dragged back to the nightmare years of hyperinflation and be forced to use the rotten Z$. It is government's responsibility to make sure the country has a stable economy and stable local currency; this Zanu PF regime has failed to do this. If the local currency is unstable it is not surprising that people would prefer to trade in stable foreign currency and it is not too much to ask that they should be allowed to do so.
At the heart of Zimbabwe's economic meltdown and political chaos is the failed political system that has stifled debate, democratic competition and denied the ordinary people their freedoms and rights including the right to a meaningful say in the governance of the country and even the right to life. To Mnangagwa and his Zanu PF thugs truths, reality and reason count for nothing in the regime's single minded pursuit of absolute power and the influence and wealth it brings.
The decision to re-introduce the Z$, like so many other Zanu PF decisions, was a political decision and had nothing to do with truth, reality and reason.
If we are serious about ending Zimbabwe's economic meltdown and all the human suffering and deaths it has brought then we must dismantle the dysfunctional political system that has allowed those in power to impose voodoo economic policies that defy all economic laws and even common sense!
@ Zwelithini Nkululeko Mbazo-Nyathi
By 2008 most Zimbabweans had lost their business, savings, everything because of the runaway hyperinflation that peaked at 500 billion%. The country’s economy has never recovered from that traumatic experience and now it is being forced to go through the same ringer yet again.
The country should have either changed course to stop the runaway inflation or scrapped the rotten Z$ as soon as inflation hit the 50% mark.
Today, Zimbabwe is the poorest nation in Africa and millions of our people now live in abject poverty. Some people want to tell us sticking to the Z$ regardless of its rottenness is being patriotic; it is being foolish, to say the least!
@ Rugeje
“For the past 20 year + there have been currency reforms and in each reform the nation is told it is done to stabilize the economy but with huge surprise none of many reforms have brought meaningful stability, So what is it that will work for Zim under ZANU government?”
Could not agree with you more! The truth is Zanu PF has no clue what to do to revive the country's comatose economy, it will not admit it has no clue and so the nation has been dragged from one blunder to the next. Sometime the nation is dragged into repeated the same foolish blunder again and again as is the case here.
A responsible and competent government will come up with economic policies to deliver economic growth and stability; Zanu PF is NOT one such government and hence the reason for the 39 years of economic turmoil and chaos. Forcing the nation to use the rotten Z$ in 2000 to 2008 when inflation peaked at 500 billion % was not just foolish is was high treason because it destroyed the nation’s economy and forced millions in abject poverty from which the nation has struggled to recover. Forcing the nation back into those nightmare years once again is criminal insanity.
Zimbabwe is stuck with a corrupt and incompetent Zanu PF dictatorship. The nation should know by now, after 39 years of the same rubbish, not expect any sensible policies and economic recovery. If we are serious about ending the economic meltdown then we should focus on getting Mnangagwa and Zanu PF to step down so we can finally implement the reforms necessary for free, fair and credible elections.
As long as Zanu PF remains in power this country is set to sink deeper and deeper into the abyss!
The Zimbabwe Congress of Trade Unions has rubbished statutory instrument 142/19 and warned that workers are ready to engage in mass action if the government doesn't reverse the decision to ban the use of foreign currency.
In a press statement held in Harare on Tuesday ZCTU said, "With impunity and no sense of shame, the government is shying away from responsibility for the destruction of the local currency in the first instance and now the multi-currency system that it inherited from a functional state of the GNU in 2013.
The monthly inflation rate in Zimbabwe is already 80% in other words the RTGS$ or new Z$ will lose half its value every six weeks! No one should ever be forced to accept such an unstable currency as legal tender! No one! If this Zanu PF regime cannot come up with economic policies that result in a stable local currency then the least the regime can do is allow the people to use stable foreign currency as legal tender!
Millions of ordinary Zimbabweans are living in abject poverty today because their businesses, savings and everything were wiped out during the last hyperinflation years of 2000 to 2008. ZCTU is 100% right in demanding that people must be allowed to trade in a stable currency. It will be insane to allow the regime to drag the nation back into those nightmare years once again!
@ Tshabalala
“Which country in the world uses foreign currency in their land? don't you think removing US$ is ending of uSiphatheleni and Cash Hoarders, although this Cash Hoarding need to be dealt with severely. Those who are holding foreign currency should open Foreign Accounts or change it using the legal channels . Are you calling for demonstration for Regime Change? Please don't be reckless. Mthuli has reapplied the law which was there during the Smith Regime the same law which lives in every country, remember this was changed by zanu pf to promote their corruption.”
You have missed the point completely. The question is would you accept to be paid in a currency that is losing its value so fast, at 80% monthly inflation rate (growing exponentially), that every six weeks it loses half its value? Or would you prefer to be paid in a currency that is stable, at 5% per annum inflation rate, it will take two decades to lose half its value?
If you chose the currency that is losing half its value every six weeks then you have no economic sense none common sense! You clearly have no clue what inflation means and are just a blundering fool.
The hyperinflation of 2000 to 2008 which peaked at 500 billion % destroyed the Zimbabwe economy and forced millions into abject poverty from which many have yet to recover. To suggest that was acceptable in the name of patriotism of using Z$ is madness!
The only people who benefited from the hyperinflation of 2000 to 2008 are the corrupt and tyrannical ruling elite who had access to the foreign currency at the super low official exchange rate and then sold the same forex at the inflated black-market rate. The ordinary Zimbabweans were forced to sell all their forex at the low official rate. No ordinary Zimbabwean in his/her right sense would want to be fleeced again!
"Legitimacy is an issue - last year's elections were illegal, and not free and fair. All reasonable observers concede that," said David Coltart.
True, "last year's elections were illegal and not free and fair" and yet you and your MDC A friends still participated out of greed as you admitted in your book.
“The worst aspect for me about the failure to agree a coalition was that both MDCs couldn’t now do the obvious – withdraw from the (2013) elections,” you wrote.
“The electoral process was so flawed, so illegal, that the only logical step was to withdraw, which would compel SADC to hold Zanu PF to account. But such was the distrust between the MDC-T and MDC-N that neither could withdraw for fear that the other would remain in the elections, winning seats and giving the process credibility.”
MDC A has accepted the parliamentary election results because you won a bait gravy train seats on offer. You are holding out in accepting the presidential result because you want to squeeze cabinet positions from Mnangagwa. In otherwise you are bargaining legitimacy for gravy train seats forgetting that it is only the people in a free, fair and credible elections who give legitimacy!
Speaking at the ongoing African Union-United Nations Wildlife Economy Summit in Victoria Falls yesterday, Mnangagwa said: "What I said in Mozambique was indicative of where we wanted to go. (And) what happened yesterday (on Monday) shows that Zimbabwe is back to normalcy by introducing its own currency. Our currency is denominated in coins, RTGS and bond notes."
Banishing trade in the foreign currency when the local currency is as sick as a parrot will not make the people have any confidence in the local currency. There is nothing normal about having a monthly inflation rate of 80%!
When Mnangagwa started crowing “Zimbabwe is open for business!” soon after the 2017 military coup many people doubted his claim since nothing much had changed. Still, they gave him the benefit of the doubt. Many have been shocked to see that he had done nothing, absolutely nothing, to justify his claim that the country was ready for business. Mnangagwa is just one of those tyrants with an inflated ego but nothing to justify it, a paper tiger in every sense of the word!
Obert Gutu you have now assumed the role of defending Zanu PF policies at every turn for the purposes of winning favours with the regime. This is no surprise; we all know you are a sell-out from the GNU days when you and your fellow MDC friends failed to implement even one democratic reform in five years. Just do not try to be too clever by half!
It is great to hear you were able to withdraw foreign currency from your nostro account. Was that a personal account or company account? We hear only withdrawals from the former were allowed.
Did you find out if there were any limits to how much one could withdraw from the personal account? If there was no official limit there was one due to available cash.
Most important of all, whilst the banks buy foreign currency from individuals, can individuals buy foreign currency from the bank?
These are all very important matters affecting real people. You clearly want these issues swept under the carpet to win favours with Zanu PF but please do not insult our intellegence by trivializing the issues much less our suffering.
Zimbabwe is in this political mess because people like you sold-out on implementing the reforms designed to stop Zanu PF rigging elections. Your continued support of this illegitimate regime is nothing short of you rubbing hot chilli in our eyes. Stop it!
Tendai Biti, you are 100% correct that "Zimbabweans have suffered for too long under leadership of selfish gangsters." Sadly you have confined you criticism to Zanu PF gangsters and forgot to mention yourself and your fellow MDC friends.
We cannot continue to airbrush the historic facts that MDC has failed to implement even one meaningful democratic reform in the party's 19 years on the political stage. MDC leaders failed to implement even one reform during the 2008 to 2013 GNU, the party has continued to participate in illegal elections knowing fully well that Zanu PF will rig the elections as your colleague, David Coltart has admitted.
“The worst aspect for me about the failure to agree a coalition was that both MDCs couldn’t now do the obvious – withdraw from the elections,” explained Senator Coltart.
“The electoral process was so flawed, so illegal, that the only logical step was to withdraw, which would compel SADC to hold Zanu PF to account. But such was the distrust between the MDC-T and MDC-N that neither could withdraw for fear that the other would remain in the elections, winning seats and giving the process credibility.”
We all know Zanu PF rigged last year's elections and the regime will be under pressure to step down right now was it not for people like you who are giving the regime the modicum of legitimacy by promising it legitimacy in return for gravy train seats in a new GNU!
Yes the nation has suffered a great deal from the rule of the Zanu PF thugs but history will record that you and your fellow MDC leaders have played a major role in keeping Zanu PF in power these last 20 years! Shame on you!
To banish trade in the foreign currency at a time when inflation was surging upward, from 5% in January to 100% today, showed the regime had a sinister motive - people were losing confidence in the regime's ability to stop inflation and so the regime is hitting back by forcing the people to use the local currency by stopping the trade in all the other currencies.
If people have no confidence in the currency they are being paid in they will have no choice but to hang on to their goods or withdraw their services. This happened during the 2000 to 2008 hyper inflation years, at its peak inflation was 500 billion % and Z$35x10^24 was worth US$1.00, resulting in companies closing, empty shop shelves and untold human suffering and deaths! The real tragedy here is that the nation is being dragged back to those 2008 hyper inflation days.
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