Right now, the Government is running a budget deficit that could exceed US$2 billion this year. Our revenues from all sources will reach about US$3,5 billion and therefore we are going to spend nearly US$6 billion. Now that is a budget deficit of enormous proportions – I am certain it must be close to a world record. The problem is that theoretically, they cannot print money – which is what they did in the previous collapse from 2000 to 2008 and they cannot borrow money from the outside for political and financial reasons (we have not paid our debts or any interest now for over 20 years).
His Excellency (HE for short) is simply ordering spending and this has now completely spiraled out of control. The Ministry of Finance, simply takes orders and pays its creditors in what is called “electronic” money. The Reserve Bank sends an electronic transfer to the creditors bank and calls it United States Dollars, even though it has no basis of support and is certainly not convertible outside the country. It worked for a while but as the domestic debt crept up, so the problems associated with this madness became evident.
First the cash disappeared, almost as quickly as it had appeared in 2009. Then they issued a new local currency which they pretended was backed, but it was not and this too disappeared, almost like bad magic. Then, unbelievably, the “US dollars” in our bank accounts started to shrink.
In the days of the printing press in the basement of the Reserve Bank, I explained the phenonium of shrinking dollars to the people in my constituency as the work of a rat in their pockets. This rat ate the dollars we banked or put in our pockets so that when we took them out they bought less. Eventually the Zimbabwean dollars were shrinking at such a pace that we simply could not print enough money or in denominations large enough to make transactions possible and the whole edifice collapsed. The savings of a 100 years of enterprise and hard work vanished.
The rats scuttled away into hiding and for 4 years during the GNU sanity prevailed and the economy recovered. There were no shortages, money was in free supply and prices were stable and slowly incomes recovered.
Then in 2013, the patients in this asylum took control again and the rats came back in force. They were delighted, “we are back in charge” they crowed and immediately began their destructive work again. Different currency, now, different rules and challenges but they soon adjusted their tactics and found a dozen ways to eat their way into our money and assets. Now instead of a physical printing press, although I am sure they are servicing the machines as we speak, they have Treasury Bills, Debentures, Electronic transfers, “swipe” machines, RTGS dollars and “Bond” notes (paper currency by another name). I am always tempted to call them “Ibondi” such as might have played a part in the Bond films.
Whatever they are called, our real earnings are being converted into these new forms of currency and in these new forms they are now depreciating in real value by about 5 per cent per month – hyperinflation rates. We are back in the dwang, to use a slang expression.
Now the rats are fighting each other and this fight is reaching serious proportions. Both sides are using rat poison and this has only been partially effective. But this is not affecting the people in charge of the asylum and I suspect that that problem can only be corrected by a complete change of management – from top to bottom.
Because of the squabbling and the seriousness of the situation with the storm clouds gathering on the horizon, many in the regime have become totally disenchanted and they too are now wanting real change. This is rapidly changing the dynamics and with King Rat now in the advanced stage of senility, it might just be that the conditions for the elections, which look like they might take place as early as March or April next year, may allow for the staff to regain control and restore sanity.
When they do they will find the place in complete shambles; the exterminators will have to be called in to deal with the rats that do not flee, the cleaners will have to move in to clean things up and new rules imposed and order restored. But they will be assisted by external help and by the return of our Diaspora and an influx of new investment. I think people will astounded at how fast we will recover our dignity and pride and restore our economic fortunes.
Meanwhile South Africa is enthusiastically pursuing policies and practices that emulate what we in Zimbabwe have been doing for decades. They always were a bit “slow”. The result is an amazing spectacle of bad governance and what they call “State Capture”. This is simply a way of saying the totally corrupt, not satisfied with their regular earnings and conditions of service, are now taking full control of all key State institutions and then simply raping and pillaging State resources.
The consequence is a nasty mix of racism, economic pilfering on a vast scale and a flight of confidence without which, no country can survive and grow. So far from being an example to the rest of Africa of good governance and the rule of law, the ANC is destroying itself and in the process dragging the whole country down into the gutter. What saves them is the Constitution, the inability of the regime in power to change the constitution or to instruct the Judiciary and the strength of the private sector. But those who argue that what has happened in Zimbabwe can never happen in South Africa are getting a wakeup call, remember the adage – the larger you are the harder you fall.Post published in: Featured