Zanu-PF cash crisis myths

The People's Democratic Party is irked by Zanu-PF's unrepentant denial of the fact that they are the creators of the current cash crisis.

We believe the biggest job in providing any solution starts with defining the problem correctly, on the issue of cash crisis in particular and many other challenges for that matter, Zanu-PF have decided to misrepresent facts ,in many instances trying to find someone to blame.

Our party leader President Tendai Biti yesterday took time to provide thought leadership on ZiFM around the issue of the liquidity crunch arresting our country. It was clear that Zanu-PF is prepared to continue misleading the people of Zimbabwe in the process carrying everyone through the gates of hell.

We therefore see it important to clarify the political economy of the current economic crisis for the benefit of those who might have missed the show.

With a shrinking revenue base and a huge budget deficit of over 42%, Mr Chinamasa sought to finance the same through the issuance of toxic Treasury Bills and the maintenance of an over-draft facility with the Reserve Bank.

In the 2017 budget statement he fully admitted to the fact that he had been raiding RTGS and Nostro Balances held at the Central Bank.

The liquidity challenge forced the government to introduce the Bond Note.

The Bond Note represents an illegal unconstitutional process of money creation which is not backed by any reserve or value. Up to now, it is self-evident that the Afrexim facility of USD200 million does not exist. Even if it existed the formal processes of sovereign debt contraction have not been complied with.

Trade deficits have also averaged US$3 billion and the current account deficit has been around 20% of GDP.  The external position is such that we hardly have any foreign currency reserves.

The facts are that the banks are not to blame for the current crisis but the blame solely falls on the shoulders of the peasantry displayed by Chinamasa who unfortunately presides over treasury.

Chinamasa is creating this myth around people who come from Zimbabwe to withdraw huge sums of money and leave. Such kind of thinking defies basic financial economic logic which is the fact that all money is earned.

For someone to earn money whether a foreigner or citizen they must have created value by either selling an asset or provided a service, the "Application of Labour to Capital."

Our people deserve better for their hard work in that regard we suggest the following solutions.

   The government must allow people to work in productive sectors not in speculative industries of willy-dealing capital where you find Zanu-PF linked cartels of tenderpreneurs.
   Run a tight fiscal schedule which means we must maintain a primary balance to avoid the disequilibrium which is running the roast now.

   Allow businesses to do what they know best which is to make money and government must stay away from coordination of the market but focus on the core business which is dealing with the welfare state, ensure even development and provision of social services.

   It is our respectful contention that the government must immediately scrap Bond Notes. In the process of scrapping off these Bond Notes, the government must encourage the use of alternative money particularly debit cards, point of sell machines and RTGS facilities.

   The government must return the money they took from the RBZ because transfers of online money without real value will also not work.

   Attend to the structural issues arresting the economy to ensure that the economy starts producing again.

   Deal with the cost of doing business that is the cost of labour, the price of electricity and fuel to match the standards being used in the rest of the region.

   In the long term Zimbabwe must ensure regional integration and the creation of a Southern African monetary union which can only work when our economic fundamentals are right.

Together Another Zimbabwe is Possible
Jacob Mafume
PDP Spokesperson