#ZW$DEATH
Before it’s too late
Our call on government to fix the ZW$ decline before its too late
Since being appointed Finance
and Economic Development
minister in 2018, Mthuli Ncube
has brought about some radical
policies that have impacted on
the exchange rate and market
confidence in the local
currency.
After reintroducing the
Zimbabwe dollar in June 2019
at $USD1.00 to ZW$3.00,
Treasury and the Reserve Bank
of Zimbabwe (RBZ) has
maintained the move has been
a success despite the Zimbabwe
dollar having slid to an
informal market rate of US$1 to
over ZW$200.
At the time of writing this
report, the official exchange
rate, which has always been
tightly controlled, was
ZW$112.00 to the US dollar.
In January, Gift Mugano,
executive director at Africa
Economic Development
Strategies, a Harare-based
consultancy said the Zimbabwe
dollar “will be in the graveyard”
by June and that it will be
largely obsolete by the end of
the year.
The story of the Zimbabwe
dollar has been mired by
government’s insistence on
people using the local currency,
arrests of business people
defying the RBZ’s exchange
rate, manipulation of the RBZ’s
US dollar auction process.
Yet, 44 percent of transactions,
according to RBZ figures, are
conducted in US dollars.
When the Zimbabwe dollar was
reintroduced in 2019, President
Mnangagwa said it was a return
‘to normalcy’ and what
followed was a crackdown on
any citizens who continued to
demand US dollars for any
transactions.
The whole situation, however,
points to a government that is
detached from its people; a
government that disregards the
voices and experiences of the
ordinary people.
It does not need an economist
to conclude that the
Zimbabwean dollar has had a
major deficit of confidence and
government’s denial has cost
many Zimbabweans, whose
incomes continue to get eroded.
A significant number of
employees still earn their
money in Zimbabwe dollars and
this puts them at a
disadvantage as they have to
either buy goods at very high
prices or have to sell their
Zimbabwe dollars at very high
rates..
We believe this has had a great
impact on the social well-being
of citizens whose quality of life
has continually gone down.
With Zimbabwe having a
history where people have lost
all their savings and income
due to currency problems, we
urge government to ensure
citizens get protected and it
takes open-mindedness,
inclusivity and sincerity in
order for the financial authority
and government to start to do
the right thing to create an
environment where
Zimbabweans regain trust and
confidence.
President Mnangagwa has an
obligation to ensure that
Zimbabweans enjoy a stable
economy as he pledged in his
oath to devote his attention to
the well-being of Zimbabwe and
its people.
According to the Constitution,
the President should promote
unity and peace in the nation
for the benefit and well-being
of all the people of Zimbabwe,
and ZPP believes this includes
ensuring that the social and
economic status of the country
promotes the well-being of
citizens.