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Mangudya borrowing to buy food to stem 'panic-buying' - loans are drying up, then what! PANIC!

08 Oct 2018 at 17:30hrs | Views
I gave President Mnangagwa full marks for successfully rebranding Zanu PF as the "new democratic dispensation" and the country as being open for business. He had me and millions of others out there fooled. Sadly, it was all a gimmick and, like all gimmicks, it did not last.

President Mnangagwa and his regime expected a flood of investors to follow when he launched his "Zimbabwe is open for business!" After nearly a year in government the penny has dropped that no investors are coming. Instead of the regime sitting down and address the question why no investors have come forward the regime is resorting to the old habit of finding scapegoats for its own failures.

"The bank has noted that increase of prices of certain goods has followed the spike in foreign currency parallel market rates, which is being caused by some people bent on duping the public of their hard-earned income," said RBZ governor John Mangudya.

"The opportunists are manipulating foreign currency parallel market rates to cause unnecessary panic and despondency and destabilisation of the economy. Such counter-productive behaviour is unwarranted and should be condemned by all peace-loving Zimbabweans."

How naïve! The two people responsible for causing the panic in the country these last few weeks it is governor Mangudya and the new Minister of Finance, Mthuli Ncube. They are the ones who have just decreed that Banks convert all bank account balances from US$ to bond notes and Banks will pay all transactions from the said account in bond notes or the electronic money.

When the bond notes were first introduced the regime assured the public they will always have the right to be paid in US$ if they so wished. Now the regime has just changed the rules just like that! Whilst the ordinary people had their US$ bank balance switched at the official 1:1 to the bond note in the real world the exchange rate is 1:1.6 and falling, it is even worse for electronic money. Of course, the people are furious at being cheated out of their hard earned money!

Mangudya is going to use a $500 million loan facility to procure essential commodities.

"As advised, the purpose of the facilities is to fund the procurement of essential commodities including fuel, electricity, wheat and raw materials for the manufacturing of cooking oil and packaging," he said.

"In view of these positive developments, the bank would like to assure the public that there is sufficient fuel available in the country and, therefore, there is no need for panic-buying of fuel and other essential commodities."

This is just voodoo economics of the Mugabe days! The $500 million credit facility should be used as a stop-gap measure whilst the nation gets its own economy in order. Zimbabwe continues to be a nation that is consuming far more than it produces. We used to be the breadbasket of the region and now we are spending hundreds of millions of dollars on food imports every month!  

With investors and lenders alike shying away from investing in Zimbabwe there is no hope of reviving the Zimbabwe economy. And as long as Zimbabwe remains a pariah state ruled by vote rigging thugs investors will shy away from the country. We cannot even get those who seized the former white-own farms to grow enough to feed the nation much less have surplus for sell and earn the much needed foreign currency.

Governor Mangudya, the people have good reason to panic, they know no one, no nation, can survive much less prosper on spending borrowed money on consumable without a thought on how the growing debt will be repaid. Zimbabwe's mountain of debt is unsustainable already and many lenders have long stopped lending the country money.

The people know the $500 million to buy essentials will soon be spend, then what! Panic!

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