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'Will have local currency when economic fundamentals are right' - not right last 38 years and counting

17 Feb 2019 at 23:06hrs | Views
One of the many reasons Zimbabwe is in this economic mess is the sheer incompetence of those running the nation's affairs. Our leaders have a knack for making a mountain out of a mole hill and thus end up focusing their time, energy and treasure on trivial matters, the mole hill, at the expense of the big issue, the mountain.

"Do you think it is feasible to introduce a local currency in the next 12 months considering that the state of the economy remains poor?" asked The Standard senior reporter, Xolisani Ncube.

"Economic fundamentals need to be right before introducing our local currency. We also need social cohesion. People must be prepared to accept it for it to succeed. So we need those to be in place and we are working on ensuring that we deal with the fundamentals. We can then start to talk about the introduction of a local currency," answered Dr John Mangudya, Governor of the Reserve Bank of Zimbabwe.

One can say things here:

a) Zimbabwe has a local currency already, it is called Bond Note and Bond coins. Bond Note is trading at 1:1 to the US$ officially but has traded at 3:1 to as much as 10:1. Banks have one account for $ RTGS, for the electronic transactions of Bond Notes, and another for $ Nostro, US$. Shops and the rest of commerce and industry all have a similar arrangement. It is therefore nonsense to talk of introducing a local currency as if the nation does not have one already, it is called Bond Note.

b) If the economic fundamentals were not right why did Zimbabwe introduce the Bond Note in 2016? And why is the nation still failing to get the "economic fundamentals" right for a stable local currency, it is now over a decade since the scrapping of Z$ after inflation had soared to the dizzying heights of 500 billion per cent under Gideon Gono's supercharge money printing crazy?

c) It is most disheartening that Zimbabwe's Minister of Finance, Professor Mthuli Ncube, and the Governor of the Reserve Bank of Zimbabwe, Dr John Mangudya; the nation's two most influential individuals on monetary matters: should be squabbling about when Zimbabwe should have its own local currency when we have one already. They should be focusing on getting the economic fundamentals so the Bond Note is stable. If the Bond Note trading freely at 3:1 or what ever, there is no cash and foreign currency shortages, etc., etc. the people will not care one bit whether the local currency is called Bond Note or Zimbabwe Dollar!

Minister Ncube and Governor Mangudya are Lewis Carrol's Tweedle Dee and Tweedle Dum, fighting over a rattle whilst the nation is sinking deeper and deeper into this economic hell-on-earth.

d) It is very naive of the Zanu PF regime to believe Zimbabwe can ever achieve the "economic fundamentals" necessary for economic recovery much less economic prosperity whilst the nation remains a pariah state ruled by corrupt and vote rigging thugs.

The flood of foreign investors and lenders that Minister Ncube was confident he will attract has never happened. As much as the investors were impressed with Minister Ncube's CV they were put off by Mnangagwa's cavalier attitude to the rule of law and democracy.

Mnangagwa promised "zero tolerance to corruption" and yet has yet to arrest one diamond looter. He also promised free, fair and credible elections only to blatantly rig the July 2018 elections. Mnangagwa wanted to eat his cake and eat it too; he wanted to keep the Zanu PF dictatorship and have economic prosperity too.

All that "Zimbabwe is open for business!" masquerading, the appointment of Cambridge University Professor as Minister of Finance, appoint a 24 crack team as Presidential Advisory Council members, etc., etc. were all to give the impression Zimbabwe had changed when in reality nothing had changed.

A conducive environment for economic recovery cannot exist in the midst of corruption and political turmoil. Impossible!



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