The need for level-headed fiscal policy in crafting fiscal policy

Given the basic economic and financial principles governing the issuance and circulation of currency, one wonders at the fiscal acumen of the genius that introduced the quasi-currency we know as the bond currency. It is the history of currency that money as we know it, was introduced as a means of facilitating trade and breaking down wealth in the form of gold and, in modern times, to represent the mineral wealth and foreign currency reserves held by the central bank, whose task is to maintain sound fiscal policy and monitor currency value, or to a certain extent as a reflection of national economic performance.

We are told that the value of our bond is derived from a loan facility and guarantees from certain financial institutions, true or false we don't know. The problems presented by this quasi-fiscal policy  become apparent when juxtaposing the purpose of the currency and the practicalities on the ground. Firstly someone prints pieces of paper that have no backing of wealth or reflective of the national economic performance then calls it money(much like in the bearer check era) then insists it is equal in value to the Greenback. This would be hilarious if it didn't have such tragic consequences and is akin to a village head deciding that the leaves of the Muhacha tree within his compound have become the medium of exchange and equivalent to any one of the world's currencies or even the local currency.

Compounded with the shortage of hard currency caused by our failure as a nation to craft policy that boosts productivity to earn the nation enough foreign currency to at least meet our import requirements and the irresponsible wanton issuance of treasury bills to cover government expense, we now see a flourishing illicit trade in currency to feed the voracious appetite for hard currency to fund imports and therefore create price instability in the markets. Whether legal or illegal this is happening and will continue to happen as long as there is profit to be made in the enterprise and there is nothing our government can do to stop this. If we recall that the bond when it hit the streets, it had already devalued and is continuing to do so and when going downhill we pick up speed. That is a given.

The real problem is that when faced with problems our government for long now has chosen to solve the problems with patchwork that doesn't address the root cause of the malaise. Now we have a pair of trousers that has so many patches even the colour and texture of the original material has since been forgotten.

As the People's Democratic Party along with our partners under the People's Rainbow Coalition whose presidential candidate is Dr. J. T. R. Mujuru, we believe that Zimbabwe is in need of policy overhaul that addresses the causes of our economic problems. The problems we are facing are entirely the result of bad government policies that up to now have been geared at benefitting a small elite under an elaborate patronage system, coupled with rampant corruption as that elite placed itself above the law and and moral culpability. Economically what needs to be done is to balance our balance of payments and fiscally we need to scrap the bond, cease foisting treasury bills upon financial institutions in lieu of cash settlements and back this up with policy that will encourage more productive activity aimed at earning foreign currency that should lead to ending the liquidity crisis. Further all programs and policies, especially the populist parcelling of freebies to gain political points, that have a negative impact on our economic growth should be stopped. The principle that 'if a man is hungry teach him how to fish . . . .' should guide government intervention to encourage our citizens to engage in productive activity that will grow our economy.

So now we wonder, in the short-term, the interim or the long term, what benefits as a nation the stop-gap 'kiya kiya' measure of introducing the quasi-currency that is only usable in Zimbabwe has brought us or will bring us other than more grief. Even the money used to print it, if put to good use could improve the lives of citizens no end. It's always been about the economy and as long as there are no policies designed to grow the economy, we will continue with this merry-go-round.

THE PEOPLE'S DEMOCRATIC PARTY!
THE SOLUTION!
TOGETHER WE CAN BUILD ZIMBABWE!
THE PEOPLE'S RAINBOW COALITION!
CHASVIKA CHITIMA CHERUSUNUNGUKO!
ISITIMELA SENKULULEKO SESIFIKILE!
THE FREEDOM TRAIN HAS ARRIVED!
WE ARE IN IT TO WIN IT!

Benjamin Rukanda
Deputy Secretary-General
The People's Democratic Party.