Gazing into the crystal ball: Will the ZiG succeed where the bond failed?

We have had the ZiG for almost a week now and even though it is too early, we have decided to wade into the hot debate raging out there. Will the ZiG succeed where the bond notes and coins failed? Will it be the currency that finally solves it all? To answer this question one must look into the past and gaze upon the corpses of past currencies. This country has already murdered four currencies ZWD, ZWN, ZWR and last week ZWL. What led to the bloodletting? What do the death certificates say? What was the cause of death for all these currencies?

Dr Mushayavanhu seems like a good man

In his hopeful but delayed Monetary Policy Statement, our beloved incoming governor deftly side-stepped this issue. Only later did he tacitly admit what we all know is the cause of death. He swore by all things sacred that he would not print or allow anyone to wantonly print excess money in a way that would wreck his beloved ZiG currency. Those who know him swear Dr John Mushayavanhu is a man of integrity- his word is worth something they say. A quick Google search seems to lend credence to this line of thinking. It seems the good Doctor has moved mountains and turned water into wine at various points in his long and illustrious career.

There is just one problem with his fealty oaths to the gods of economics: It’s nothing we have not heard before. Many doctors have preceded him. Dr Tsumba was the last one to do a decent job, the rest have been frankly speaking rubbish at their jobs. They would probably disagree with me too, but you don’t burn through four currencies if you are doing a good job as the Central Bank governor. Each governor would come with his own philosophy and regime. None of them thought they would fail as miserably as they did. They all had good intentions for most of their tenure but the road to our economic woes has been paved by good intentions that never bore fruit.

Let us review some of their embarrassing and sometimes infuriating moments:

• In addition to indulging the unbridled largesse of our government, the former Reserve Bank governor, Dr Gideon Gono, didn’t want to admit that he was recklessly printing money. So he came up with the novel idea of bearer cheques. These notes would be used to fund government expenditure but the government would redeem them when they expired. They never expired and he kept making more.
• When the government wanted more money to do God knows what it is our government does with all the money it gets, he introduced special Agro-cheques which he swore would only be used by farmers. Soon these special agro cheques were being used for anything and everything with the governor’s blessings.
• He once pulled the 21-day currency switch under an Operation called Operation Sunrise. Loads of cars were bought in an expensive endeavour that cost $8 billion dollars. The exercise was supposed to be the end of “economic saboteurs” who were plaguing our economy. That failed and the zeroes came back.
• After multiple currencies like the ZWN Zimbabweans had seen enough and switched to the USD. The government and Dr Gono tried to fight them on this with misguided initiatives like FOLIWARS but in the end, they accepted the Multicurrency in February 2009.
• Dr Gono faded away during the Government of National Unity. In his stead rose Dr Mangudya the man we all associate with RTGS dollars. He is the same man who admitted to not knowing where all that RTGS was coming from. He was in charge of a system and yet could not account for the surge in RTGS balances.
• The government was of course secretly minting RTGS dollars and swapping them for USD. They did it until there was a liquidity crisis. People thought they had USD in their accounts but were shocked to learn they couldn’t make withdrawals.
• The former governor was really sweet too. At first. He promised to fix things and waved his magic wand to reveal to us the bond notes and coins. These were backed up using an enchanted facility of $200 million. He swore many oaths telling us that he would never print too much money.
• He lied and in the end he was angrily telling us that only exporters had the right to hold and withdraw USD. He even teamed up with the Minister of Finance and made us open Nostro accounts before trying to force us to us only the ZWL.
• On multiple occasions, he fixed the USD to ZWL rate while simultaneously blaming “economic terrorists and saboteurs”.
• In addition to trying to force the wider public to use ZWL notes worth fractions of the US cent he also blessed us with his RBZ auction where connected deities could get cheap foreign currency at exporters’ expense.
• Now we have Dr Mushayavanhu who tossed the ZiG like a grenade upon all of us in a move so reminiscent of Operation Sunrise that I had to pinch myself to make sure I had not time-travelled back to 2007. Sunrise 2.0 has been so chaotic most of those who rely on the ZiG/ZWL have been going through unacknowledged hell. The governor did not even see the need to apologise for the ensuing chaos. If I were a cynic I would think he is even secretly pleased with such a display of absolute power. He spoke and we all quaked.

The elephant who will not be denied

He might be a god and his powers at that hexagonal tower are absolute, but there is an elephant in the room. The Zimbabwean government has an endless wishlist it wants to fulfil. They want dams, world-class roads, competitive salaries for those in the public service, to build clinics and feed a starving nation. They will do anything to fund those dreams. They are not about to let anyone stand in the way of those. Of course, they are not economic savages. They understand that they might need to pause the printing press for the sake of inflation but eventually, the show must go on.

These Titans will never allow a puny Olympian like him to stand in their way. After all, he technically works for them. They have so much leverage over his position his oaths will be fodder for rib-cracking memes and skits at some point in the future. He too will look in the mirror and wonder what possessed him to utter these things. His predecessor once promised he would resign if his bond notes project failed. When confronted at a later date he just simply decided to redefine the meaning of failure rather than go.

I imagine when the time does come, the governor will be presented with a simple demand. Print the money we need or find us a way to make that money without ruining your precious rate. No one will stop that Uhuru train. At that point either he comes aboard as our Finance Minister seems to have done fully now or he can jump off the train.

We have a government with a vociferous appetite for funds and foreign currency. It behaves like a spoilt petulant teenager. Unlike a spoilt adolescent, it is armed with an arsenal of formidable persuasion. If that fails it can always turn to legislative coercion. This current government is particularly fond of Statutory Instruments upon which it relies heavily. A lot of these have been of dubious legal standing but then again I never went to a law school so I am just a legal idiot.

The new governor might boast all he wants, he might swear oaths on the moon and all he holds holy. We can forgive him. He is new to the job. He is giddy with excitement. This is a dream come true. That’s why he is being prodigal with these sweet promises of monetary and fiscal propriety. He’ll be quick to swear to anything. You should not mistake such blazes for the true fire of stability we seek. The words of the of the new governor give off more light than heat. Bitter experience has shown us that eventually, those alluring words will give way to anger, hubris, suspicion and ultimately contempt.

We have been torturously dragged through four currencies. To those hailing the ZiG as the Canaan we seek we give you leave to indulge in your newfound ecstasy. Feast on the dreams of Uhuru but do not fault us for being sceptical and unimpressed. We have no choice but to give Dr John Mushayavanhu the benefit of the doubt. But we have words of wisdom for him. He should read 1 Kings 20:11.

The man who is putting on his armor to go to war should not brag. It is the man who lives to take it off who should brag.

The Holy Bible 1 Kings 20 vs 11

The governor is girding his ZiG armour to go to war. He can only beat his chest in victory once he has conquered the economic beast that slayed his predecessors. When pressed about his utterly shambolic record at the RBZ, Dr Gideon Gono, blamed it on the elephant in the room. “The elephant is still there.” He said. There was a haunted look in his eyes. He tangled with the elephant and lost everything. His reputation, his honour and even the last shreds of his dignity.