On 01 January 2008 I was arrested in Bulawayo after an undercover policeman bought a beer with R20,00 in a shop I owned yet we did not have a license to sell our wares in foreign currency. The police also found US$120,00 in the till which they took as evidence. I was released the same morning and in about September that year went to court where I pleaded guilty alongside my manager and we were each fined US$200,00. The court called the fine a deterrent. Less than four months later, Zimbabwe legalized the use of multiple foreign currencies making the license requirement redundant. Such is the unpredictable nature of the Zimbabwean economy.
By 2010 and we were predominantly using the USD as our currency of choice in Zimbabwe. However, deflation hit heavily after an initial appreciation slowing down the local economy, this was not helped by a sustained depreciation of regional currencies against the USD, particularly the South African Rand, currency of Zimbabwe’s biggest trading partner. In 2015 the government officially demonetized the Zimbabwe dollar, something the economy had already long done. As the USD appreciated much was been made of how Zimbabwe’s exports had become less competitive and local production was dying as imports become increasingly cheaper. This led to the introduction of the import ban that wasn’t really a ban but, according to government, just restrictions in the form of SI64 in 2016. At the same time some analysts even went as far as to say the USD was ruining Zimbabwe’s chances of recovery and pointed to the China’s Renminbi being recognized by the IMF as a main world currency as reason for Zimbabwe to officially adopt the currency of our erstwhile friend.
Whilst this didn’t quite transpire, flawed arguments against the USD led to the introduction of bond notes in 2016, the currency that’s not really a currency but should be accepted as a currency on par with the US Dollar which is still a real currency, according to the Reserve Bank. This has done little to alleviate cash shortages and the plethora of economic problems that Zimbabwe faces. These problems have, in many cases, worsened due almost completely to policy flip-flopping by the government in general and the Reserve Bank in particular, who at times, have been nothing short of dishonest. A case in point is the actual introduction of bond notes which saw legal challenges and duplicitous statements from none other than the Reserve Bank governor John Mangudya. Mangudya has also consistently ignored government profligacy’s contribution to the downward economic spiral blaming everything from Visa and MasterCard transactions to blaming payment of DStv subscriptions as a form of externalization.
Zimbabwe has also seen a spate of new and increased taxes in the last three years as government tries to mop up any hard currency out there to feed it’s insatiable appetite for ultimately fruitless expenditure, including the rather dubious 5% Health Levy now charged on airtime and mobile data. Wether this money will benefit the supposed beneficiaries is anybody’s guess.
As we hurtle towards elections in 2018 Zimbabwe’s biggest problem remains what it has been for decades, an untrustworthy government that chops and changes economic policy to suit ruling party politics on a whim. Unfortunately with the opposition in disarray with no clear economic blueprint either, some have said the only real hope is a reformed ZANU PF. As some cry and others laugh out of a need for comic relief, one can only wonder in dread what the future holds for southern Africa’s former bread basket.