Why is govt avoiding sorting out the currency mess?

Fixing the currency could arguably solve over 50% of the country’s major challenges and this is why we say the government must, not should, act.

TWO thousand seven hundred Zimbabwe dollars ($2 700) to the United States dollar, that is the parallel forex rate right now!

There is a phrase at the end of Furious 7, a 2015 American blockbuster action film which is part of the Fast and Furious movie franchise.

The phrase comes towards the end of the film after a well-drawn out climatic fight between the film’s lead, Dominic Toretto, played by Hollywood star Vin Diesel, and Deckard Shaw played by Jason Statham.

In it, Toretto says the line “the street always wins” and proceeds to stomp the ground on the parking structure he was fighting with Shaw on which collapses and renders Statham’s character immobile.

While it’s only a film, the phrase “the street always wins” is true about the current crisis.

The central bank tried to introduce a semblance of a forex market but with controls and it was those restrictions that ultimately led to the Zimbabwe dollar being overvalued.

Resultantly, on the streets, the Zimbabwe dollar has found its true calling and now the market is using that to determine the value of the beleaguered local currency.

This can be seen in the prices of wheat flour, bread, and sugar increasing significantly by about 40%, while maize meal prices increased nearly 60% in Harare since February, according to United States Agency for International Development. Most of these increases happened last month alone.

Some cash dealers, whom our reporters spoke to, claim several reasons behind the increases which include Zanu PF buying forex for election campaigning, paying government suppliers after months of a moratorium, and speculation.

However, whichever the case, the rate is rising and flying.

No amount of politicking will change that fact and why would it? Like Toretto says “the street always wins”, and in our case, especially when the Zimbabwe dollar is not allowed to determine its own value.

The sad thing about this whole situation is that government does not or will not accept its failure considering elections are around the corner.

In fact, according to the Zimbabwe National Statistics Agency (ZimStat) just $33 044 could adequately sustain a consumer’s basic needs last month. At today’s rate, this translates to US$30,87 while effecting the parallel forex rate, this drops to US$13,21.

Do you believe you need just US$13,21 to pay your rent or mortgage, buy food, and clothes monthly?

Of course, ZimStat justifies itself by stating that a consumer in the southern African nation just needs to consume 2 100 calories to not be deemed poor in terms of food, but even that amount is not affordable.

Side note, women and men have different calorie intakes so 2 100 calories is arguably okay for ladies but for men, it is not.

So, with government justifying this, sadly, there will be no admission at the abject failure of the Reserve Bank of Zimbabwe and Ministry of Finance to reign in the spiralling Zimbabwe dollar.

Fixing the currency could arguably solve over 50% of the country’s major challenges and this is why we say the government must, not should, act.

Because, if we continue down this road which we have already lived back in 2008, like Toretto says, “the street always wins”.

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