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Banks: If gold rusts, what will iron do?

14 May 2022 at 06:22hrs | Views
Native Commissioner Oates, I presume!

LORD Jonathan Oates' ambition is becoming a latter-day colonial Native Commissioner.

Too late chum, both by age and history! Still both don't deter him from trying, or indulging in compensatory conduct, so late and so far away from Zimbabwe whose colourful flag flutters in gay defiance of any imperialist pretensions from whomsoever.

Like hunters and missionaries of yore, he thinks he gains British fame and memory by playing warden to hapless black Zimbabweans: his benighted but refractory natives sorely needing western benediction and tutelage.

He shall be ignored, soundly too!

Kowtowing NewsDay

I would not have bothered about him.

Until I was stung by NewsDay's knuckles-prostate headline which read: UK digs in on Zimbabwe!

For NewsDay, Oates, a temporary teacher we employed here in the early 80s after running away from unemployment at home, and now part of a horde of hoary peers, personifies UK and the British state!

A clever response would be to get Cde Chinotimba to blast this so-called Lord title which seems the source of his cross-boundary illusions — and then challenge NewsDay to do a story headlined: Zimbabwe takes a dig against Albion!

It does not require  a trainee journalist in first semester to know who speaks for the British government.

Or who embodies the British State! In the meantime, our thoughts to Her Majesty the Queen, whose wellness we speedily wish and yearn for!

Intellectual deceit

I find myself in a bit of an invidious position.

I did a series of threads on the economy, in the wake of the bank-induced mayhem we currently face.

Yes, the instability we face in the economy is firmly and squarely in the court of some banks who have decided their bottomline should come from currency speculation and not from lending, their core business.

In summary, I debunked the carefully cultivated myth claiming the instability in the economy, manifesting as prices volatility — exchange rate is a price too — came from movements against the "unwanted" Zimbabwe dollar.

Very well cultivated because, as they are always wont to, big banks and big businesses quickly deployed their loquacious, rote-memory motored economists to obfuscate clear matters using sonorous English flashy press statements on expensive gloss.

They rely on elementary literacy in our newsrooms to get their false story amplified.

But those halcyon days of erudite deceit are about to come to an end.

My thread simply revealed — with copious substantiation — that upward price movements on all commodities, including and especially on basics, was in all currencies: from the Albanian lek to the Zambian kwacha!

It didn't matter which currency you sought to transact in: the price trend was uniformly upward, suggesting this was not about the exchange rate primarily. Rather, it was about monopolies and monopolistic malpractices which made our markets both imperfect and inefficient.

More examples popped from readers who testified in sympathy.

Many quoted bread, cooking oils, meats, tissues: a whole repertoire of consumables, or FMGs, all locally manufactured.

Does he know delegated powers?

Even Mugaga, one of the economists enlisted to muddy waters, knew that and had made that in his own household.

This is why his pathetic presentation dwelt on legalities and protocols he least understands.

Why was the statement delivered by the President, not Minister of Finance or Governor, he asked.

What legal instruments allowed for such interventions, he asked, again like a basic man.

He doesn't seem to know that ministers of Government function through delegated powers of the President!

Fortuitously, about the same time, US' Biden was doing a similar presentation on the American economy which is proving hard and harder to bridle, thanks to America's war against Russia, fought through suicidal Ukraine.

Mugaga's opposite numbers in America could never have raised puerile points we suffer from him here.

They are more knowledgeable and self-respecting!

Anyway, that is Mugaga's problem; he has chosen to be a clown and so should not hate us for raucous, scornful laughter!

Biti and Jamwanda in same basket

My invidiousness came from Parliament where Tendai Biti decided to tackle Minister Nzenza, the Minister of Industry and Commerce, on the same subject.

"The prices of basic commodities are actually rising in United States dollar terms", opined Biti.

"I would like to give you an example of cooking oil. Last week it was at US$4, but today it is US$6.

So an increase in prices in US$ terms cannot arise as a result of exchange control manipulation or mismanagement.

Prices are going up in US$ terms….There are local companies accessing cheap foreign currency on the auction floor, but they are still raising their prices in United States dollars.

Lastly, you have got certain supermarkets that are now refusing to accept local currency for a locally-produced commodity.

OK Bazaars, for instance, is not accepting local currency for locally produced cooking fat", added Biti.

One atengesa!

Here is my problem. I brief the President of Zimbabwe, not Tendai Biti who is in the opposition.

I won't say he read my thread before Parliament, even though the thread was done a day before, and rattled the whole Twitter, waking up even those in a stupor from smuggled medicinal cannabis.

That would be presumptuous, vain in fact.

The only little, tenuous link between Tendai and I is that we are both gargantuan readers, and love literature overmuch.

When he was in GNU – that far back – we would swap titles for reading matter the few times we met. But that was then!

Several moons later, and in different stations and spaces, we find both of us sharing an argument, a perspective!

I am discomfited. Pane One wedu atengesa!

 Slapping everyone with a gag order

Chamisa has slapped all his minions with a gag order.

He must know what that is, if he is the advocate he claims to be. No one else is allowed to speak for Triple C, except himself, Hwende and Mahere.

The rationale behind the gag order is simple: the yellow thing – that's what it is, with no constitution, no executive, or an elective congress to validate the triumvirate who lead it – must have messaging discipline.

Like most elementary communicators, Chamisa thinks this means limiting mouths that speak, and not grounding a common thread in all utterances! I meet lots of that in my profession, and perfectly understand this recurring communication foible.

 Circumventing the gag order

But here is what this has done. Listen! Biti has found a way around that arbitrary handicap.

About the same time Biti is raising these issues in Parliament, Mahere, backed by Ostallos, is recording Triple C's reaction to the President's measures, at a well, yellow-decorated press conference.

I went through Mahere's perorations. The English was superb; nothing else. No wonder the media brushed it aside, to save her from further ignominy.

She is still young, and thus quite delicate in mind and ego!

Biti's question and line of reasoning, on the other hand, grabbed headlines.

It was thoughtful, well considered, well illustrated, sincere, as behoves a former lawyer-shuttled-into-an-economic ministry, thanks to GNU!

Those of us who watch could not avoid the deadly comparison between Chamisa's two minions: one volubly ignorant, another insubordinately sensible.

We know who got bruised, and who became an extended patient of the whole situation.

Well done Faith Zaba!

Kudos to the editor of the Zimbabwe Independent, Faith Zaba.

Whatever runaway op-eds she published this week, her anchor story on recent measures by Government was spot on, in the main.

But she came short of fully informing her market. No journalist ever does. Maybe she had her eyes on the paper's revenues.

Banks are big advertisers; no editor wants to be on the wrong side of them.

True, much of the currency abuse through the parallel market used to take place in offices and on operating systems of the mobile telecommunication industry.

None of the mobile operators here was innocent, including our own NetOne  and Telecel.

Of course Econet, through its EcoCash, was the biggest culprit.

Except all of them cavorted with banks, again including banks in which Government has a stake.

Which forces me to make a passing yet critical point: Government should ensure its corporate entities are manned by cadres with sufficient national consciousness, atop technical skills.

Government enterprises cannot be in league with private entities which attack the fabric or ramparts of the very State they serve, even imperilling it in the process. It doesn't make any iota of sense at all.

If gold rusts . . .

Back to Faith Zaba.

After the crackdown in the mobile money sub-sector, the State – like the Creator – rested, slept in fact!

The long sleep of a god after creation!

During which time, the culprits recovered from their fright, and looked for new avenues and platforms on which to resume exactly the same malfeasances.

All the phantom accounts which used to enable misdeeds on mobile platforms, migrated and snugly ensconced themselves right inside vaults of banks. Several banks!

This is where we are today, and why the RBZ's Financial Intelligence Unit is asking for suspense and other internal accounts under various descriptions, created for purposes of illegally purchasing foreign currency on the parallel market.

This is why there is this whole furore on lending, and on third party accounts.

We now ask: if gold rusts, what will iron do?

When CZI gave clue!

I quite like reactions from business.

Industry, according to the Zimbabwe Independent, has castigated RBZ's dismal failure in ensuring borrowed funds – presumably from banks –were properly and lawfully utilised.

"A lot of companies have stockpiles and they are the ones taking money from banks to go and buy foreign currency on the market. It's a pity no one is following up on how the money is being used.

"This is what is driving the rate," said a source the Zimbabwe Independent would not name. The source went further to say, most helpfully: "The banks should be challenged to follow-up on what the companies are using the money for and what it was intended for and not used for buying foreign currency. There is a link between lending and foreign currency as people are buying the US dollar for speculative purposes. The Zimdollar therefore depreciates. IF YOU LOOK AT THE COMPOSITION OF BANKS' PROFIT AND LOSS, YOU WILL REALISE THAT IT'S MADE UP OF FEES INCOME, NOT LENDING FEES. SO IN THE SHORT-TERM, ONE WOULD BE AFFECTED BY NOT LENDING (my own emphasis)."

Forget about the attack on RBZ; it's run by elders, with Cde Panonetsa at the helm.

What in essence CZI is saying and doing, is confirming that indeed money lent by banks found its way into illicit parallel market activities, on the wink of RBZ!

When the business monolith fails

All this apart, several fundamental things have happened.

First, a CZI survey says that the foreign currency auction system was largely responsible for raising industrial capacity in the country to above 55 percent in 2021, up from a measly 40 percent the year before.

And it admits that much from the US$147m used to enhance capacity came from RBZ through the auction system.

Exports have grown tremendously as a result, something its members will not want eroded by ruinous speculative activities in the economy.

More importantly, CZI now wants a unitary exchange rate, founded on an efficient price discovery mechanism.

This new reckoning by CZI, patently puts manufacturers apart and away from banks and ZNCC. It's a rupture which the financial authorities must exploit to the fullest to end indiscipline ensuing in the market, once and for all.

Failing homogeneity based on clashing interests will ensure a self-checkmating business sector.

I am excited.

A class in and for itself!

Secondly, the public is no longer standing with business over price volatility.

The consumer is punch-drug, and wants respite.

The debate in the various media has exposed business, with even those who used to side – often unthinkingly –  with business in order to be avenged on Zanu-PF and Government, now taking a hefty u-turn, and blasting business.

Business is now exposed, and can no longer bank on public opinion to support or hide its wiles and subterfuges.

We needed to arrive at this critical stage where false alliances make way for fundamental class differences so each class pursues its own interests. This is what Marx called a class in and for itself!

Death of politics of stayaways

Thirdly, the stayaway which the opposition traditionally fomented, and which this time sought to execute through the shadowy Pachedu, several external actors from UK, America and South Africa, found no favour with focused Zimbabweans.

There is very little political capital likely to be got through social unrest built on false consciousness, borrowed causes and grievances.

People are far ahead of political games, something Biti might have seen, well ahead of Chamisa, Mahere and Ostallos Siziba.

This is why he used Parliamentary Question time to speak like a Zanu-PF government minister! Without shrill support from the opposition, and given all that Government has done, business can no longer hope to fish in troubled political waters.

Or use the same to distract princes of power while making a killing. Even Eddie Cross, an ex-opposition figure, now admits only a few fat cats are having it nice at our expense.

Stomach for a rough tackle

Fourth and perhaps more decisively, Government has shown it has a stomach for a rough tackle.

No one in business ever thought the President would take and announce the steps he took. Pity those in business will never know what other drastic measures would have been announced, principally on the Zimbabwe Stock Exchange.

But Minister Mthuli Ncube left scarce little to imagination.

He said: "We realised that the two [parallel and stock markets] are now related."

When a whole ZSE is made Siamese twin to an illegal parallel market, a few heads at the helm must turn grey. They should ask Old Mutual and the whole fungible shares saga. Besides, the Minister has made it plain he will not hesitate to unleash more new tools kusvika zvanaka!

This in Elections Season chums!

Let me take business in a little bit, at no cost.

We are close to crucial harmonised elections which are only a few moons away. Increasingly, the environment gets poisoned.

Political conclusions, however wild, are very easy to reach.

The politician suffers from acute angst. He will not hesitate to remove anything, everything he perceives as standing in his or her way for re-election.

It's that plain.

I actually wonder why those in business missed this basic fact of political life and business environment in the season of political choice.

Let me end here; so much about bipeds. Mine is Animal Kingdom and jennet and a mare bray for mating!



Source - The Herald
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