IN an effort to mitigate cashflow problems, the government has approved the addition of a number of currencies as official legal tender in Zimbabwe.
The currencies that have been drafted into the monetary system include Japanese yen, Chinese yuan and Australian dollar.
The Reserve Bank of Zimbabwe (RBZ) claims that this measure will prove to be the long-awaited panacea for Zimbabwe’s cashflow problems.
In allowing a multi-currency system to operate in Zimbabwe, the Finance ministry is oblivious to one of the basic tenets of control. The tenet states that what you do not have you may not exercise control over and what is not yours is very difficult to manipulate.
In simple terms, the Zimbabwe government will not control the inward and outward flow of these currencies; hence the possibility of another drought within the banking sector. Surely government officials, particularly those in the Finance ministry, do not suffer from debilitating amnesia to have forgotten how they failed to manipulate the supply of Zimbabwe’s own Zim dollar which could be churned from Fidelity Printers with gusto, zeal and patriotic haste.
During the bumpy ride of the Zim dollar, the government had some control over the currency yet it still went on a moribund trip to total oblivion through uncontrollable super-inflation.
Observers beg the question: “how will the government manage to reconcile its books with all these currencies which are likely to find their way into and out of the country through illegal means?”
The decision to include more currencies for circulation in Zimbabwe should not be accepted without being subjected to constructive criticism. Critics and detractors lambast the government for lacking a clear fiscal policy.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
RBZ’s directive incorporating extra currencies does not state exactly how those currencies will find their way into the Zimbabwean market.
It leaves people to speculate that perhaps the officials in the Finance ministry envisage tourists from those countries bringing suitcases and briefcases stacked with their countries’ monies.
If it really be the reasoning of economic planners in the Finance ministry, then it is disturbing.
Surely in this age of cashless transactions, would an economic strategist at RBZ be enthused by the idea of tourists from China, Japan and Australia bringing into Zimbabwe loads of their countries’ cash in suitcases?
Such thinking can only be ascribed to a rural sole trader somewhere in Ndolwane or in Gwatemba townships.
Suppose it is the case that tourists will be the vehicles bringing in the cash, one would want to know what Japanese tourists with trunks packed with crispy new yen notes would want to buy in Zimbabwe.
The answer is they will come, see the Victoria Falls and leave!
Apart from paying for services they will buy a few souvenirs and voila, they will be back in Tokyo.
The adventurous ones may want to buy gold and rhino horns thus perpetuating destructive mineral exploitation and emboldening the resolve of poachers.
This adds a criminal dimension to the issue. For the additional currencies to make an impact in the liquidity crisis, the Zimbabwe Revenue Authority will have to turn a blind eye to tourists with huge stashes of cash.
This on its own is problematic.
International criminals will surely take advantage of this situation to clean up the cash they get through foul means.
One can imagine a drug baron from Beijing bringing in loads of Yuan for laundering in Harare.
Money laundering will be easy as criminals can bring in huge quantities of dirty monies, bid for tobacco at the action floors and zoom away with aromatic flue-cured tobacco for resale in Beijing.
This way the criminals would have their dirty monies rendered squeaky clean; thanks to Zimbabwe’s haphazard fiscal policy.
The additional currencies will impact negatively on semi-illiterate villagers as they may fall victim to the foul ways of con-artists and currency speculators.
The most obvious problem that the unsuspecting villagers will have to deal with is the ongoing exchange rates.
International currencies have a tendency to lose or gain value on a daily basis.
Unscrupulous foreign currency dealers may only apply the going exchange rates only when it suits them. The availability of several currencies covering a huge spectrum in terms of value and strength will be confusing.
People may not understand the difference in value between US$10 and AU$10 (ten Australian dollars). A trader without scruples will use sly tactics to convince the buyer that US$10 and AU$10 are the same in order to make some profit without any effort.
There is also a glaring problem of change after a transaction. Would someone who pays for services using USA dollar bills accept Japanese Yen as change?
Whither to our great country of Zimbabwe? Could these be the desperate kicks of a dying horse?
In this theatrical satire about a country we call home, the swan-song in the background is getting louder. The economy cannot be rigged and the foreign currency denominations cannot be printed at Fidelity Printers. Masola waDabudabu is a social commentator
