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Mthuli Ncube has little to offer to Zimbabwe's sodomized economy

12 Sep 2018 at 10:15hrs | Views
The Zimbabwe's national debt is said to be well above $18 billion with the foreign debt contributing $7.5 billion. The foreign debt ($7.5 billion) excludes the private sector foreign debt of $2.5 billion and the $1.5 billion borrowed from Africa Import and Export Bank (Afreximbank). The domestic debt is estimated at a figure above $6 billion and the government's overdraft at the Reserve Bank of Zimbabwe is now said to be well above $1 billion. The total figure does not include the latest loan given to President ED Mnangagwa by China in August/September 2018. In short, this is how the ZANU PF government has been sodomizing our economy and mortgaging our country. How did ZANU PF government spend this money?

I once told the nation that the Zimbabwe's economic burden is too huge for both ZANU PF government and Mthuli to carry without the assistance of MDC - Chamisa. The solutions proposed by finance minister Mthuli Ncube so far are insufficient, irrelevant and off context to the real economic problems in Zimbabwe. Mthuli Ncube should be serious and accept the fact that Zimbabwe is importing everything i.e. toilet papers, toothbrush and even condoms.  In an economy where 'oxygen' is also imported, financial polices won't work and planning is a very difficult task. What it means is that, Zimbabwe is not generating foreign currency but spending a lot of it through payment of imports.
Mthuli Ncube is saying that he wants to clear the loan arrears of World Bank and African Bank worth $1.8 billion without telling us the source of the money. He is likely to borrow a loan to clear another loan. The salary wage bill is said to be consuming 90% of the country's total budget and Mthuli Ncube is promising to cut government expenditure, a strategy that will not enable to raise even $50 million.

What Mthuli Ncube should know is that, our National debt ballooned by more than 2000% since 2000 and is now standing at a figure above $18 billion. However, with such huge borrowings, Zimbabwe's economy never recovered but only improved during the Government of National Unity before collapsing again. What it means is that, even if Zimbabwe is going to get a grant of $50 billion the economy will not be sustainable unless the question of political legitimacy is addressed. When MDC says, 'you can rig votes but you cannot rig the economy' they mean it. This is the problem that should be addressed in order for Mthuli Ncube to be successful.

Mthuli Ncube said he is considering three options to jump start the economy before the end of 2018. The first option is to consider adopting USD only (without bond notes). This option is very impossible to implement before sorting out the issue of political legitimacy. Mthuli should know that, ZANU PF introduced bond notes because there was no money (USD) in circulation that led to money shortage because of the huge amounts of imports. In a country where everything including toothbrush is imported, it means all the foreign currency is exported.  Bond notes (though not successful) were meant to solve the problem of foreign currency shortage and money circulation. Without addressing the problem of political legitimacy, the opposition members (who are more than 80% of urban dwellers) will not deposit their savings in Zimbabwean banks. When the Zimbabwe dollar was scraped off in 2008, all citizens in Zimbabwe lost their savings in banks and they cannot be cheated again. Mthuli Ncube should work very hard to install confidence among Zimbabweans in order for them to trust the Zimbabwe banks and this can only be done by addressing the legitimacy problem. Scrapping the bond notes will make the economy to be worse than before.

The third option is for Mthuli Ncube to reintroduce the Zimbabwe dollar. Time is not yet ripe for Zimbabwe dollar to be reintroduced. There is no difference between Bond notes and Zimbabwean dollar in terms of performance. The issue of imports and exports should be stabilized before thinking of bringing the Zimbabwe dollar back. The political legitimacy should be addressed as well before reintroducing the Zimbabwe dollar. If Mthuli Ncube is planning to bring back the Zimbabwe dollar, he should also consider buying a lot of 'photocopying money machines'.

The last option for Mthuli Ncube is to adopt Rand by joining Rand monetary authority. This option is likely to work despite the fact that South Africa's economy is experiencing some kind of recession. Zimbabwe is a neighbor of South Africa and an estimated 3 million Zimbabweans are said to be in South Africa. This strategy is likely to solve the problems of cash shortages and flow but will not solve the legitimacy problem. However,   the future of South Africa's economy is bleak, the proposed land reform without appropriation is likely to determine its success. Economists should address this before Mthuli Ncube considers to implement this option.

"It is possible for a crocodile to pass through the eye of the needle than for Mthuli Ncube to take Zimbabweans to Canaan". The question of political legitimacy should be addressed in order for Mthuli Ncube to move the country forward. From the figures above, I think you should be now appreciating the fact that ZANU PF government sodomized our economy and mortgaged the country to China. Join me in condemning ED's cabinet and call for the Government of National Unity.

Congratulations to the Zimbabweans for having two presidents. One president was imposed by ZEC/ConCourt  and the other president is the president of the people (I urge you to come to Gwanzura stadium in your thousands) to witness the inauguration of people's president on 16 of September 2018.

In my next piece I will address the diasporas' proposal to mobilize all urban dwellers (opposition supporters) to boycott products produced by companies affiliated or owned by ZANU PF members if the GNU push fails.

Don Chigumba is a mixed methods research specialist, can be found on twitter @Donchigumba

Source - Don Chigumba
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