Zimbabwe's doomed re-engagement exercise

As the PDP we have consistently argued against the regime's re engagement exercise. Our objection has been clear and is based on principle. It has been based on long years of understanding Zanu-PF and its predatory DNA. What drives it, What pushes it, and What its interests are.

At all material times we have maintained that Zanu-PF is driven by one thing and one thing alone, the power retention agenda. That it has no other interest other than that of maintaining its hegemonic rule over Zimbabwe and the reproduction of its system of patronage, capture, fear and predation.

We have always argued that this is a rogue state oiled by kleptocracy, corruption, nepotism and electoral authoritarianism.

We have maintained that despite the charm of Chinamasa and others, there are no reformers or reform minded people in Zanu-PF and it is impossible to have reforms without reformers.

We have argued that since Lima, the regime has been busy lying to a gullible international community in order to lay its desperate fingers on resources and resources alone, without the pain of reform.

Since 4 May 2016, the world of Zanu-PF has collapsed.
The wheels have come off and the true nature of the beast has been exposed.
The emperor as we have always argued, has no clothes.
 
In 2015 the Government lied to the International Monetary Fund (IMF) that it had met its structural quantitative bench marks. One of those benchmarks was that it would meet and maintain a primary balance in its accounts.

In March 2016 the IMF in a statement in Harare maintained the lie that Zanu-PF had indeed met its target.

But now we know this is a lie.
 
This Government has all along been living dangerously beyond its means. It has never respected fiscal discipline nor austerity. It has been financing its insatiable appetite for waste through issuance of toxic treasury bills which are now well in excess of $3billion.

Further, the Government has stolen bank balances kept at the Central Bank and used the same to finance itself.
 
The regime did not meet the structural benchmark of a primary balance no matter how disingenuously this may be defined. On the contrary this regime has maintained a terrible budget deficit which we have no doubt is now close to 12 % of GDP. This is why they are cash shortages that have caused havoc across the land.
 
The regime is busy doing what it does best, lying to the Zimbabwean public.
 
It wants us to believe that cash shortages have been caused by externalization and illicit financial flows.

It wants us to believe that huge current account deficit is responsible for cash shortages.
 
These are lies told by lying liars. They are liars. They lie about lies that are on lies and in the end they are not capable of separating the lie from a lie.
 
If RTGS balances have not been stolen then a simple forensic audit would clarify this.The regime will not agree to such an audit.
 
On the 4th of May 2016, the regime announced the reintroduction of the bond note. That announcement was a material fact that ought to have been disclosed to the IMF ARTCLE IV team that was in Zimbabwe for three weeks in March 2016. That announcement ought to have been disclosed before the IMF Board that met on in May 2016. The regime did not disclose it. It did what it does best, LIE of course.
 
The IMF has no choice but to regard the lie as declaration of non-cooperation.
 
The IMF and the rest of the international community must simply understand that it is dealing with liars. Unless of course, it too wants to protect liars. Unless of course, it too wants to promote the lie that there is genuine reform in Zimbabwe, that present day Zimbabwe under chief liar Robert Gabriel Mugabe, can actually pull through some reforms.
 
The announcement of the introduction of bond notes, changes everything and the IMF must do the right thing and urgently review its position regarding Zimbabwe. Its Board decision of in May was based on fraudulent facts and false assumptions. The Board must review its decision.
 
Of course due process must be followed .The regime must be given an opportunity of explaining its lies and in the process further hang itself.
 
For the moment surely the LIMA road map must be suspended until a review mission and a fresh Board meeting are held.
 
Now, the regime wants us to believe that it is not bringing back the Zimbabwean dollar.
 
What a lie.
 
They have to bring back the Zim dollar. They have no choice. The hole at the Reserve Bank is simply too big. If they don't, its jail time for Chinamasa and Mangudya.
 
So they are now maintaining the lie that they are not bringing back the Zim dollar.
 
But bringing back the Zim dollar will not work for various reasons, including the fact that, they must cross the insurmountable legal challenges. If the bond notes are bonds in the technical sense of the word then they must be in compliance with the Public Finance Management ACT as well as the constitution.
Bonds are collateral instruments issued by treasury and therefore a levy on the consolidated revenue fund. Parliament must approve these instruments of tenure which unlike money are not inter changeable. If they are not bonds in the technical sense then they are money.
 
Now, one can't simply introduce a new currency and declare that it is one for one with the US $. This is sheer lunacy.
 
Money as an effective tool of exchange requires trust. It was lack of trust that destroyed the Zim dollar.
 
Zimbabweans will reject the bond note, they are already doing so. No one is banking anymore. Everyone is getting their money out of the system. Bank deposits have shrunk by more than 50 %. It would have been more if the money was there anywhere.
 
Another hurdle that the lying regime will have to cross is that, currency is a function of a country's reserves. It is a function of the country's current account.

With a current account deficit of more than 12 % of GDP Zimbabwe is not ready for its own currency. Zimbabwe would need exports of at least be $9 billion and at least another $5 billion in reserve for it to be able to reintroduce the Zimbabwean dollar. At the present moment our reserves are the paltry SDRs left by our leader Tendai Biti during the Government of National Unity.
 
Besides a whole lot of technical processes have to be complied with which are clearly beyond the capabilities of the present Governor whose knowledge of the law, or rather lack thereof, is shocking.
 
The challenge facing Zimbabwe today is that the economy is not producing and will not produce as long as this regime is in place. Production has collapsed; deindustrialization and unemployment are the order of the day.

The regime can lie all it wants. The truth of the matter is that President Mugabe and his lying Government have failed neither the British Government, Africa Confidential or anyone else can change this fact.

The re-engagement process is doomed and the sooner all of them stop lying the better for all Zimbabweans.

Another Zimbabwe Is Possible.

Jacob Mafume, PDP Spokesperson and
Vince Musewe, PDP Secretary for Finance and Economic Affairs