Dear John, our problem is not about money

It has been in the nature of ZANU (PF) to want to quickly announce economic policy positions without bothering to anticipate the potential negative consequences or seriously address the underlying fundamentals. As a result we have a country in crisis that is being managed from one calamity to another.

MangudyaAs we experience the cash crunch time is not on ZANU (PF)’s side and so the typical response has been to quickly want to address liquidity issues through the seemingly easy way out and print of bond notes and yet we all know that our problem is not really about money, but about the value system of ZANU (PF) and our failure as a country to address Mugabe’s failed leadership as an issue of national security and stability.

Without a change in leadership and serious structural socio economic reforms and patience, Zimbabwe is really going nowhere fast. The IMF needs to be bold and tell it like it is.

The idea of a national currency backed by US dollars is not a bad one at all. In fact, without our own currency we cannot achieve many things that matter. We cannot invest as much as necessary in our productive sector and revive the economy and our sovereignty will continue to be highly compromised. But as we all know, the problems we are facing have been in the making since 2013, they certainly have not just happened to us by accident.

There is no doubt that our problems are likely to  continue as they reflect the inability of our political leadership to plan and act and be accountable in their actions, no matter how much money we may print or borrow. The fundamentals are certainly not in place, as acknowledged by John Mangudya, the Reserve Bank Governor, who in my view has a difficult task to run such an important institution under a regime that has conflicting motives and questionable values.

I think that the RBZ is rushing the idea of bond notes because Zimbabweans and the international community have no confidence in ZANU (PF) and Mugabe’s leadership. The pain of 2008 is hidden in our brains like a nightmare and can only be treated by a new face at State House. We cannot run away from that fact. In fact ZANU (PF) has lied to us so many times it has become a normal habit so much so that even if they were to propose the correct solutions, we still cannot trust that they really have the political will to do the right things and will implement them effectively.

I am still a bit flummoxed by the idea that exporters will be incentivised to export more when they will get 40% of their export proceeds in Rand and 5% in Bond notes as an “incentive”. Firstly they will simply under-invoice export sales and keep their dollars offshore. Second, what will they use the bond notes for? They will use them to pay local expenses and even wages so, invariably, the Bond notes will end up in people’s hands and in circulation anyway. So to give an excuse that we should not be alarmed because Bond notes are only an incentive designed to boost exports is insulting our intelligence.

The fact of the matter remains that those Bond notes will end up in circulation in peoples’ hands and the people have no confidence in them. In addition export proceeds will decline as exporters choose to rather keep their dollars elsewhere.

I also think that our business sector continues to play a big role in postponing the inevitable. There is this idea in Zimbabwe that the business sector cannot be a change agent and as a result, despite the incessant complaints by business people themselves about how things are getting tougher, they is the sense that there is no outside. If, for example, they all rejected to accept the Bond notes then that will be the end of that story.

The problem is that we have a highly compromised business sector some of whom are very corrupt and of questionable values. They are their own worst enemies.

We want a Zimbabwe where the private sector has moral fibre and leads and stops playing a subservient role to politicians, most of whom have neither run successful businesses nor have they had any managerial experience.

If we are to prosper as a country, we will need to protect and promote private enterprise while ensuring that all government policies are informed by the business sector or entrepreneurs before being implemented. They are our rain makers when it comes to tax revenues and job creation and should participate in policy making. This is such a simple idea and yet it appears politically difficult for ZANU (PF) politicians.

Our country desperately needs a new paradigm of political leadership, something we can never expect from a ZANU (PF) government and President Mugabe in particular. They have forgotten that all their comforts and luxuries are as a result of the hard work and creativity of our business people.

The bond notes are clearly not going to solve this problem. Only fundamental political and leadership change can put us on a new economic trajectory and this requires that we dismiss ZANU (PF) from government. They have failed us in all areas, politically, economically, socially and morally and done so in such a fantastic manner it’s not funny at all.

There is no way out except another GNU. In fact, in my opinion, the 2018 elections can even be postponed to give us adequate time to implement all the necessary economic and political reforms. We have to level political playing field first and then revive the economy.

The worst nightmare for us would be a rush to 2018 without fundamental reforms and ZANU (PF) manages to cheat us for another five year mandate till 2023. The consequences of this are just too ghastly to contemplate.

Another Zimbabwe is possible!

Vince Musewe is an economist and author based in Harare. He is also the Secretary for Finance and Economic Affairs of PDP. You may contact him on [email protected]. He writes in his personal capacity.

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