We were left with the skeleton of what once was a thriving, diversified and quite sophisticated economy. I called it the â€œNeuron bombâ€ effect â€“ buildings left standing but everything else dead.
This was achieved by taking money from peopleâ€™s accounts, printing money recklessly and allowing the elite access to hard currency at artificial rates of exchange. We tend to forget that if you were â€œone of themâ€ and not â€œone of usâ€ you could buy a state of the art luxury vehicle for price of a cigarette.
Throughout it all we attended briefings at the Reserve Bank â€“ a 26 floor luxury office complex in Harare, to listen to a smiling, jovial Governor called Gideon Gono who spoke always with great authority about what the Bank was doing to â€œsave the countryâ€. His every word was analysed and debated, but I cannot recall a single time when he was seriously criticized for what he was actually doing. Even after his disastrous spell at the helm of the Bank he was still considered as a serious candidate for the Minister of Finance.
But he built a massive home in Harare, fitted with every luxury money can buy and a statue of himself at the gate. He borrowed US$75 million from banks and built an empire of farms and companies.
At the end of his term in Office the total value of all cash in circulation was $19 million and the total revenue of the State was US$280 million in 12 months. Shops were empty, filling stations growing grass on their forecourts and three quarters of our population were on emergency food aid to keep them alive.Â Zanu PF had been in total control of our lives for 28 years.
Then we had a National Unity Government for four years â€“ February 2009 to July 2013. At the end of 2008 Zanu PF had taken full control of the newly discovered Marange diamond field â€“ 80 000 hectares of sand rich in alluvial diamonds. In the next four years firms linked to Zanu PF extracted US$17 billion in raw diamonds from the sands at Marange. They poured out of the country, flooding world markets and forcing de Beers to curb sales from their mines in South Africa and Botswana and depressing world prices.
The revenue stream could have paid off the Zimbabwe debt in 24 months, doubled Civil Service salaries at a time when everyone was on very little, provided schools and schooling for all our 4 million children. It could have refinanced our national economy and capitalized our broken productive sector and infrastructure. Instead, the revenues simply vanished. Three years later in 2015, a slightly bewildered President Mugabe would comment that he did not know where the US$15 billion from diamond sales went. But believe me he knew it had been produced and as always he exhibited a shrewd understanding of just what they had been doing during the GNU.Â Zanu PF had been in charge of the Ministry of Mines for four years and we had been robbed, in broad daylight, yet again.
Then they used the negligence of the SADC and South Africa and held an election in which they used all their tricks. They romped home, rolling over MDC and taking back full control of the Government. They lost no time in making up for four years away from the feeding trough.
In weeks a budget surplus of US$100 million was turned into a deficit of US$500 million. In two and a half years they took US$2,5 billion out of the economy and replaced it with Treasury bills. Banks holding US$6 billion in depositorâ€™s funds, bought most of them, pension funds bought some, all using funds lodged with them for safe keeping. These are only valuable if they are redeemable. Let me tell you that the Zanu PF Government has no chance or even intention of ever repaying the money they have borrowed in this way. This basically is wholesale theft of private money.
Then they went one step further into debt â€“ they raided the Nostro accounts supporting interbank transfers. If you made a transfer of funds to someone, they took the money from your account but did not send it on â€“ they diverted these funds to their own use â€“ in the private sector we call that â€œtheft by conversionâ€. They took our money and gave it to Zanu PF and called it an overdraft in the Reserve Banks accounts. In reality they lent our money to the State, without our approval and without even acknowledging it or accepting responsibility â€“ and the overdraft carries no interest or repayment date.
Now they are taking US$200 million a MONTH from export receipts and converting it to their own use and control â€“ that is US$2,4 billion a year. They replace these funds with RTGS dollars that have no real value â€“ they are pure fiction. By my estimate at this stage the private banks are holding US$4,3 billion in worthless script issued by the Government of Zimbabwe using the Reserve Bank as its agent.
In the event (now guaranteed) that the Zanu PF regime in Harare fails to persuade anyone to lend them very large sums of money, they can NEVER repay us the funds they have converted to their own use and squandered. If we do not get rid of this regime and replace it with a Government that will earn the respect and support of the rest of the World, then once again the Zanu PF regime will have robbed us of nearly everything we have been able to accumulate since they destroyed all liquidity in the decade up to 2008.
At the end of this Month (November 2016) they are going to start issuing a new Zimbabwean currency â€“ forget the fiction that this is an â€œexport inventiveâ€ â€“ that is just plain nonsense â€“ the new currency is just another form of just what they have been doing since 2013 â€“ turning real money (our money) into worthless paper. This is a pyramid scheme and it will collapse shortly. When it does it will pull down every bank, building society and pension fund. Those most affected will be the very people who have been most responsible for Zanu PF control and power â€“ the Civil Servants.
To survive we must all retreat into our bunkers and only come out when the war over our heads is over and the dust settles. As was the case in the decade up to 2008, only those who operate in the informal economy will survive. The only hope of the rest of us and this includes the entire private sector and the Civil Service is to rise up and overthrow this predatory State and replace it with a new democratically elected government that will restore our dignity and credit worthiness as a Nation.
Only then will we be able to go into the world market for help, secure the funds to pay our creditors (and all Zimbabweans who are victims of this Zanu PF Ponzi scheme are now creditors) and then start growing our way out of trouble. This is perfectly possible â€“ but only under a new democratically elected Government and we need that to happen now and not tomorrow.
I have many friends in Zanu PF â€“ always have had, but I have come to the conclusion that they have always run a predatory regime which has exploited everyone else for their benefit. There are no redeeming features and they have to go, lock stock and barrel.Post published in: Featured