THE Zimbabwean economy has not been kind to the ordinary person who is still nursing the scars of the 2008 hyperinflationary era that wiped off savings, and earnings. A decade later that spectre has returned as the failings of President Emmerson Mnangagwa have left the country facing the ghosts it hoped to keep locked in a never to be seen again closet.
What is apparent, given the situation obtaining on the ground, is that the government has in practice dollarised, but insists the local currency is “the currency of choice”, a far cry from reality.
In a clear case of the ostrich syndrome, a psychological term to describe behaviour where people proverbially stick their heads in the sand to ignore the glaringly obvious problems. The government has been blind to the reality and continues to prescribe wrong remedies to the crisis.
The tumbling of the local currency which shed nearly 79% of its value on the first day of being floated under a foreign currency auction system on Tuesday, can only spell danger.
After all, the bond note has become useless, to the extent of being rejected in the market.
Yesterday, Finance and Economic Development minister Professor Mthuli Ncube’s response to questions from NewsDay on the rejection of the local currency by the market did not inspire any confidence. He proffered alternatives that clearly are neither good for men nor beast.
“Take the rejected notes to the bank and get new ones,” he said, but is that a solution Professor?
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The solution is to be realistic and confront the elephant in the room, admit the local currency no longer works.
The situation has gone out of hand. There is no need to politic over matters of life and death as doing that which is proving disastrous as it is sad and irresponsible.
All has been tried by this government to stabilise the evidently troubled currency and all has failed.
Fuel price has risen to US$1,28 from between US$0,90 and US$1,05 and from $21 in local currency to $70 per litre.
The effects of the increase in fuel prices are there for all to see and hyperinflation is chief among them.
Prices of basic commodities will without doubt shoot to the skies, transport costs will go up, the manufacturing side will be hard hit, agriculture will not be spared and this can only spell ultimate doom for the ordinary Zimbabwean toiling all day to eke an honest living only to be paid in useless Zimdollar.
Bread prices have gone up from $50 to $86, evidence that the government is recommending wrong medication to the economy.
What must be made loud and clear is that the local currency has failed to work and the government has sneaked the US dollar into all aspects of trading but is not paying workers using the same. Think of a civil servant or any other ordinary worker awaiting his or her salary this month.
Because of hyperinflation, what will the salary buy? Will it be able to pay rent? Will it be able to pay for children’s online education in the wake of the deadly COVID-19?
Sadly, answers to these questions are in the negative.
For the civil servants, even the paltry 50% pay rise they got and the much-debated US$75 COVID-19 allowance will all be eroded by inflation and it will be back to zero, again.