Scrapping US$ as legal tender will ‘cushion’ against US$ pricing – imposing rotten Z$ will stifle trade
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.
Zanu PF must step down now so we can implement the reforms necessary for free, fair and credible elections. This is our only hope of ending the madness of this corrupt and tyrannical Zanu PF dictatorship!
Source – zimbabwelight.blogspot.com