THERE is no single issue which has been as topical and sometimes controversial in the contemporary discourse as the current multi-currency dispensation which the Zimbabwean government embraced in February 2009.
From 2009 to date the media has been awash with articles and pronouncements made on the merits and demerits of dollarisation.
Needless to say most of the pronouncements and articles have been based on fear, hearsay, speculation and ideological fury.
Few articles published in the past have been based on sound empirical evidence gathered from the field through valid research techniques to establish the credibility and reliability of the same.
A major problem with an argument that is solely based on opinion without recourse to facts is that such an argument is potentially endless and over time tends to be an exercise in futility or a waste of energy.
The good thing about such debates when conducted in the public domain is that they provoke some people in society to research to validate or invalidate opinions expressed in the media.
It was against this backdrop that a cross-sectional study was conducted in Bulawayo Metropolitan Province to establish the impact of dollarisation or the multi-currency dispensation on different social groups. The specific findings of the study are the subject of a forthcoming journal article.
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Nevertheless, this article seeks to summarise key findings to contribute to and inform the current discourse on effects of dollarisation on the Zimbabwean polity.
The study singled out eight social groups affected by dollarisation, namely, the youth, the workers, the self-employed, the unemployed, business people, non-governmental activists, students and the pensioneers.
It is important to observe that most of these groups overlap since definition of societal roles of people is not a static concept, but a dynamic and sometimes amorphous notion.
For instance, a worker can be a student at a college or university and most students tend to be youthful.
The major finding of the study was that dollarisation was perceived to have contributed to economic stability which is now characterised by low inflation levels and improved capacity utilisation by domestic industries though some respondents observed that in the past two years, production has been declining because of fears/uncertainty triggered by the political uncertainty which preceded the July 31 harmonised national plebiscite.
Some business people and formally employed people revealed that dollarisation had improved their livelihoods because of improved profitability and incomes compared to the period of the Zimbabwe dollar.
A few business people observed that the multi-currency dispensation had enabled them to expand their companies, as they have been able to acquire new space for their activities.
Some companies were able in the past four years to acquire new machinery so as to update their production technologies. Most unskilled, semi-skilled workers and those doing menial jobs including those who survive on piece-jobs argued that their livelihoods had marginally improved because of dollarisation.
Some revealed that their spouses had to supplement family income through informal trading activities such as cross-border trading and vending in the central business district of the Bulawayo.
They decried harassment from city council by-law enforcement agents and declining purchasing power due to retrenchments as well as the upsurge of hard currency inflation as major factors militating against the viability of their spouses’ trading activities.
The youth and the student population praised the adoption of the multi-currency dispensation as a primary force that arrested the runaway inflation of 2000-2008 which had made life a nightmare.
There were some students who argued that the multi-currency dispensation had worsened their plight as the government could no longer use the local money markets to fund deficit spending so as to provide social safety nets to vulnerable groups like retired people and those who are economic dependents.
Some students, especially those in colleges and universities, argued that the multi-currency dispensation had exacerbated social vices such as prostitution, robberies, drug trafficking and corruption by both public and private sector workers.
The empirical study revealed that the group which was most negatively affected by dollarisation were the retired. These are people who invested their energies and abilities in driving the economy in the past, but are now too old to continue in employment and hence they leave their jobs because of the provisions of legislation in Zimbabwe.
Most people who retired before dollarisation lost their savings when the currency switch took place. The pensions they are getting either from government or the private sector are not enough to sustain their families.
Therefore, some of the retired have been forced to come out of retirement and are earning a living by doing part-time jobs, non-formal jobs and being self-employed.
This has obvious negative effects on their health as well as crowding employment space for the ever increasing number of the unemployed. On the question of abandoning or deviating from the multi-currency system, 90% of the survey respondents were of the view that the country must wait for at least ten years to consider a return to the Zimbabwe dollar or domestic currency.
The major argument for the retaining of the basket of regional and foreign currencies was that they were based on stable economies and that current economic fundamentals did not justify a return to the Zimbabwe dollar.
Some interviewees went to the extent of arguing that a return to the domestic currency on the basis of nostalgia, fears of the future, sentiment and ideological fury was bound to produce negative effects on the economy, thus triggering a regression to the economic malaise of yesteryears.
