ZIMBABWE’s economy has been in the intensive care unit for decades now. Doctors know what the problem is but unfortunately the patient’s recovery is taking some bit of time.
Revival of the economy has taken long owing to myriad issues; corruption, policy inconsistency and currency mismanagement among many other challenges.
Zimbabwe has had too many currency experiments for its short post-independence history. Sadly, all these experiments ended without any positive result.
After record hyperinflation hit Zimbabwe between 2007 and 2008 when the Zimbabwe dollar crashed, giving way to a multi-currency system widely associated with the stability-inducing inclusive government that subsisted until 2013.
When bond coins and notes were mooted around 2016, violent clashes with authorities were reported with the government responding with unprecedented heavy-handedness against the organisers, who included #Tajamuka and Unemployed Graduates.
Besides the bond notes — which were meant to deal with cash and foreign currency shortages — the protests were also against general economic mismanagement and corruption in the late former president Robert Mugabe’s administration. The bond notes stirred uncontrollable memories of hyperinflation.
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The year 2008 was too close and unforgettable experiences citizens went through then were still fresh in their memories. Zimbabweans were not mistaken in rejecting the surrogate currency, which was initially backed by a US$200 million Afreximbank facility, because a few months down the line, the market started indicating otherwise through rising inflation.
Although the Zimbabwe Gold currency that was introduced in April 2024 seems to be showing some measure of stability, its lasting power is yet to be tested as it is less than two years old. Its current life has been largely sustained by tight Reserve Bank of Zimbabwe control.
The business sector has repeatedly complained of liquidity challenges, citing this as one of the biggest challenges to their quest to remain operational. Many companies have closed shop.
In an environment where power deficits have hampered production, particularly in the mining and agricultural sectors, liquidity challenges and other ills have continued to threaten timely revival of the economy despite authorities painting a glossy picture.
Meaningful economic growth and advancement must translate into visible social transformation. However, Zimbabwean citizens continue to get rosy pictures of the country’s economic prospects and yet their lives are perennial tales of endurance.
What makes the situation more painful is the obscene wealth paraded by politically-connected individuals who have made money through corrupt means. Some sections of society have openly said Zimbabwe risks deteriorating into the laughing stock of both the region and continent if authorities fail to act quickly to arrest the rot associated with graft.
When Zanu PF won the 2023 Harmonised Elections, the majority thought that mandate would push them into focusing more on reviving the economy. Instead, they have turned the country into a battleground as factional battles take centre stage in the ruling party. Valuable time is lost daily as people turn their attention and energies towards power retention at a time when they should be building on the said successes to ensure meaningful social transformation consistent with the pursuit of an upper middle-income economy by the year 2030.
Recently, the central bank indicated it had shifted from a fixed timeline mono-currency transition plan to a conditions-based approach where the changeover will only happen after meeting strict benchmarks.
Authorities had been warned against rushed de-dollarisation and mono-currency adoption, saying it threatened investment and was a test on confidence and trust with the financial services sector. The sector is still reeling from the impacts of the 2007/2008 hyperinflationary period.
The new approach seems to have changed banks’ attitude towards advancing loans which the productive sectors of the economy badly need.
There has to be a shift in sincerity on the part of government, especially with its policies that can change overnight, destroying decades of investment.
Some of the policy shifts are a result of personal greed and selfishness.
Currency experiments must now end and citizens hope de-dollarisation will not be pushed through but will wait for certain conditions such as six months of import cover and single-digit inflation among others.
Once these conditions are met then stakeholder consultation must take place to see what the productive sectors of the economy think about the currency change.
Wilson is the founder and leader of the Democratic Official Party.