By Sij Ncube
Harare, May 06, 2016 – EDWIN Hama was one of Zimbabwe’s finest singers and song-writers who released the hit with the lyrics Asila Mali (We are broke) in the early 1990s to coincide with the start of the economic upheavals under President Robert Mugabe’s administration.
The chart bursting song on Wednesday resonated with most Zimbabweans who lived during the period when news filtered Mugabe’s regime intended to introduce new bond notes, amid a myriad other desperate measures by the monetary authorities to address the crippling cash shortages and liquidity crunch.
It also reminded the nation of the days of former Reserve Bank of Zimbabwe governor Gideon Gono who printed billions worth of Zimbabwean bearer cheques at the height of the country’s economic crisis to bankroll the cash-strapped government.
The printing press at Fidelity Printers operated round the clock in desperate attempts to keep the regime afloat.
There is consensus among the generality of the population the introduction of the bond notes marks the earnest return of the Zimbabwe dollar albeit via the back door, after it was abandoned in 2008 at the adoption of the present multiple currency regime.
Former finance minister and opposition PDP leader, Tendai Biti is adamant the bond notes indicate the return of the Zimbabwean dollar, pointing out it “marks the gross admission by this regime that it has failed and failed in absolute terms and that it will drag every one along in the plunge to abyss that now awaits this economy”.
“It is a decision that will see many of the remaining companies reach breaking point and simply shut down. Few are prepared to relive the nightmare of the melt down period of 2007 and 2008. The move will also engineer a fresh wave of externalisation, under banking, tax avoidance and evasion,” charged Biti.
He said the directive that 40 percent of bank deposits starting from 5 May, 2016, will now be converted to the South African rand is blatantly unconstitutional and must be challenged in the courts.
“It amounts to a devaluation of the US dollar by at least 20 % in real terms given the volatility of the rand. The move will leave a desperate work force already hit with low disposable income further impoverished. The return of the Zimbabwean dollar is thus a stark reminder that this is a rogue regime that cannot be trusted and is not capable of reform,” he said.
Former education minister David Coltart concurred, adding this was the beginning of “the slide down the slippery slope”.
MDC-T shadow minister of finance, Tapiwa Mashakada, agrees the failure Zanu PF regime has re-introduced the Zimbabwe dollar.
“Zimbabweans are kissing good-bye to the last vestiges of macro-economic stability. It is very crystal clear that government is warming its printing press at Fidelity Printers. History repeats itself. Zimbabwe has back-slided to its 2008 economic comatose position again,” said Mashakada, in a statement Thursday.
“These are the consequences of a stolen election, corruption, illicit financial outflows, and lack of fiscal discipline, externalization, a growing public debt and the decimation of production. The much touted Zim- Asset has been a monumental failure. The economy cannot be rigged. Confidence is at its lowest level. Very soon the Zanu PF government will start printing money again. There will be a run down on deposits followed by capital flight,” Mashakada added.
There are fears the government would print the notes to bankroll its political campaign ahead of the crunch 2018 elections in which the country’s opposition are contemplating a coalition to wrestle power from Mugabe who has ruled Zimbabwe since independence from Britain in 1980.
South African based financial and business journalist Trust Matsilele says it is folly to say bond notes are not an equivalent to the Zimbabwe dollar, pointing out that terminology or semantics are immaterial.
Matsilele notes that bond coins are exactly playing the role of the Zimbabwe dollar but with an inflated value.
“The Harare regime has admitted that they can’t arrest the economic and currency crisis. This is an open admission that Zimbabwe worst days are back and in no time the Zimbabwe dollar will hit the economy. This move without doubt will send panic to citizens and we are going to see long queues people withdrawing their money from banks,” he said.
Maxwell Saungweme, a development analyst based in Afghanistan, added his voice on the issue which has gone viral on social media, describing the Zimbabwe economy as “in shack down” and a casino economy run on “untested and previously failed email experiments.”
“The prevailing cash shortage cannot be mitigated by producing valueless money not backed by commensurate gold deposits. The reintroduction of the Zim dollar under the guise of bond notes is an admission of total failure by government and monetary authorities. They are just regurgitating the failed experiments of 2008.
“We were on this path before. Bringing the Zim dollar by back door won’t help it. What is required now is political and leadership change set up institutions that inspire confidence and attract investors and emergency budgets support from donors in the interim. Our government and monetary authorities have again pressed a panic button and have shown that they have no new ideas. The best thing is for the regime to step aside and allow others with better ideas to come in.”
But Mugabe’s apologists have come out guns blazing in support of the introduction of the bond notes, accusing critics of the government of spreading alarming and despondence in the economy.