By Francis Chinjekure
February 2015 marks six years since we have adopted the muliti-currency system in Zimbabwe. The move was intended to curtail the hyperinflationary forces and the liquidity crisis that have haunted Zimbabwe for more than a decade. It’s only four years remaining and we are about to close another decade without any substantial economic gains since we adopted the dollarization system. The much hyped 2011 11.9% GDP growth was not as enormous as it sounded in actual fact. For the record double digit economic growth is celebrated worldwide but in our case maybe we forgot we were counting from zero, and counting from zero any number can translate to bigger percentages. We were obliged to believe the economy was back on track, but the truth is the economy will only be back on track if we find the courage to reintroduce the Zimdollar (Period).
We cannot deny that dollarization brought about some positive changes to the economy. Major gains were the ability to buttress the macroeconomic environment. Inflation has been reduced and in some instances in 2014 we went through negative inflation (Deflation). I have mastered the relationship between Inflation and Interest rates in my previous studies and experience and I have been surprised by the way interest rates became adamant to changes in Inflation in 2014. The forces of demand and supply are no longer applicable in Zimbabwe as a matter of fact, of which a market is a sphere in which those two forces takes influence for every good, commodity or service. You can not talk of a market without such forces.
The most insinuating thing is that the economy is on a free fall and it does not take the eyes of a rocket scientist to confirm that. In the news everyday and in social interactions you can tell no single person is even happy with the way our economy is perfoming and also no one would tell were we are heading with the mediocristy created over the years. It has come to my attention that, It’s not like the government does not want to solve the economic crisis but they are faced with such an enormous and complex challenge that takes not reading the books or taking example from others but getting down with reality to be solved.
Of note, one thing that the Dollarization of the economy has succeeded is to make Zimbabwe a defunct market guided by survival principles instead of market principles. It has become very hard in such a market to instigate market growth or else to guide the market to expand or contract in quest of growth. Clearly in the process we have surrendered our powers as a country to have a say in our economic functionalities. We have been reduced to optimists and persimists in as far as our future is concerned and hope is our last line of defence. But for how long should we go both the government and the governed citing hope as that which will take us to better days.
Unless we return to the Zimdollar our economy is doomed.
Why has it become difficult to reintroduce the Zimdollar when it is the only solution to Zimbabwean woes?
Zimdollar is the only solution and i repeat, but as long as the situation is handled by politicians we will never live to see it coming back mainly because the masses have some snake bite effect with it. Politicians guns for the hearts of the populace so that they may be voted into power by the same people. So as a matter of fact confronted with a situation they would take a bad decision if it is in favour of the people and at the expense of the same people and generations to come just because those people had no knowledge how the other side of the story they have presumed to be bad was going to solve the situation. We are taking advice from the wrong people on this matter. Why the hell should you be found in the street asking a grade seven dropout if they want Zimdollar back and because they have seen the dark side of it definitely they will say no. For the record if you are a politician and 99% of the people say no to Zimdollar you will definitely say no with them so that they will vote for you.
Therefore, once we find a way of separating politics and economics I am very sure an economic turnaround will be plausible. If this means offloading the monetary functionality from the RBZ and create an independent Economic Intelligence Unit to solve the situation then it is woryh considering to do it.
The only loud argument I have heard so far on why not to reintroduce Zimdollar is people are afraid of the inflation and lose of value in the currency but I am sure even if this can be solved people will still hate it.
If you have any economic view on why we shall not bring Zimdollar back please I am very much available to hear your views and discuss on how best to handle the situation because I believe the is a solution to every situation.
*Francis Chinjekure writes in his personal capacity and can be found on twitter via @FrancChinjekure*
Photo credit: www.banknotes.com
