Wednesday, June 12, 2024

Absence of trust will hamper a Zimbabwe currency

Zimbabwe’s political woes and economic problems will not end until or unless the power elite recognizes the difference between public service and being employed.

The rot will not end until politicians and civil servants stop pretending that there are shortcuts to economic recovery and that political tranquility can be achieved in a politically and economically divided state.

Since independence, Zimbabwe’s rulers have never subscribed to worldwide economic tenets and have always believed that economic rules that govern international economic intercourse does not apply to them.

Unless and until Zimbabwean rulers recognize that economic do’s and don’ts, along with the very basic economic canons, apply not only to the world at large but to them as well, there shall be no peace in the valley.

For one, the Zimbabwean leadership seems to get a kick out of making reckless, misleading announcements that raise people’s hopes for a few hours until reality strikes, bringing the nation down on its backside.

In the last three months or so alone, both Zimbabwe’s President, Emmerson Mnangagwa, and his beleaguered Finance Minister, Mthuli Ncube, have made public pronouncements on Zimbabwe introducing its own currency “before the end of the year (2019).

A few weeks ago, Mnangagwa, talking to a group of onlookers as he participated in his monthly “clean up campaign”, where he is always photographed conveniently pushing a broom or placing liter into a plastic bag, said that he wanted Zimbabwe to have its own currency before the end of 2019.

His Finance Minister, an academic of note who reportedly holds a PhD in Mathematical Finance from Cambridge University, has repeatedly said the same thing repeatedly.

And this makes people wonder how the lauded economist Mthuli can blindly champion the “voodoo economics” that Mnangagwa admits he knows nothing about.

“I am not aware of any country which has no currency of its own, but that is not my field ÔÇô I am a lawyer ÔÇô but I am told that except for Zimbabwe I haven’t been told of another country which doesn’t have its own currency,” Mnangagwa told Bloomberg news on the sidelines of the US-Africa Business Summit in Maputo, Mozambique, on Thursday. Hungry for recognition of sorts, Mnangagwa likes to talk about himself being a lawyer though without any evidence that he ever set foot in a court of law in Zimbabwe.

But then, lawyer or no lawyer, leadership does not depend on education as we witnessed with the multi-degreed former president Mugabe and most presidents in Africa and even America.

“Even poor countries have currencies from what I hear, so we intend to introduce our own,” Mnangagwa added.

I am not sure that he is aware that having own currency is not a matter of printing money. That money must be backed up.

In earlier years, money used to be backed up by gold reserves in the possession of a government. For a variety of reasons, Zimbabwe no longer has enough resources to do this.

Nowadays, most currencies are backed up by a government order. They call it fiat money.

But then if confidence in a government or banks is near zero, such as in Zimbabwe, the currency will not have any value in or outside its own borders. Again, as Zimbabwe amply demonstrates, its word is worthless in and outside the country.

Zimbabwe has a lot of groundwork to do before it can introduce its own currency that can be accepted outside its own borders.

The first thing to do is to boost confidence in people so that the people start having faith in government, the banking institutions and in general business.

This immediately calls for an all-out war against corruption, with stiff and strict legal consequences for undermining monetary laws.

Filling cabinet ministries with academics does not mean assured success. We have seen them abandoning established and proven tenets of economics in efforts to please or aid political leaders.

Government, and especially its officials, still need to come down to the level of the people for whom those laws or regulations are meant to protect.

The approach and recommendations that Mr. Ncube is taking, his attempts to ignore basic economic norms and doctrines that his profession has hammered into him over the years will not bear fruit, as already can be seen.

Mr. Ncube’s lackadaisical approach to the ailing Zimbabwean economy are a disgrace to the fraternity of economists and shall forever shame him when his equals ask him a question he answered correctly the first year of college.

Most importantly, though, Mr. Ncube must and should be concerned by what the people of Zimbabwe, whose resilience has sustained and continues to sustain the nation, think.

The government of Zimbabwe is running on the determination of its people. Their flexibility and the drive to survive, the concern for family that was instilled into their blood and the drive to fight off defeat in protection of oneself or family are the qualities Zimbabwe still stands for and refuses to be in ruins.

The rule of law must be re-established and fairness ought to be evident in everything the government does.

This last week, the courts, which, themselves, are generally not viewed as neutral or fair, intervened in the way interviews for potential candidates for commissioners to sit on the Anti-Corruption Commission. There seemed to have been corruption in the handling of candidates for the Zimbabwe Anti-Corruption Commission – ZACC.

Wrong priorities and skewed application of the law continue to dog the country.

Last week, Zanu-PF youths demanded that former First Lady Grace Mugabe be stripped of her sixteen farms and be allowed to keep only one yet many individual members of the current ruling elite own multiple farms.

And just the other day, the government was reported to be busy arranging to seize a farm owned by former Education Minister and Mugabe loyalist, Jonathan Moyo.

The absence of fairness, the unequal application of the law, naked government vindictiveness and lack of respect are only a few of the things that undermine confidence in the government and, at the same time, can prevent Zimbabwe from introducing a currency that can be treated with respect and confidence by not only Zimbabweans but by those outside its borders.


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