The Zimbabwean government might deny it all they want but the two hyperinflationary periods that our country has seen and is seeing can all be traced back to the central bank’s policies. Most of the problems we are going through would have been easily avoided if the RBZ had any sort of spine instead of the pliant skippers who have been at the helm for the past 20 years or so.
Now that we are going through another hyperinflationary period the International Monetary Fund (IMF) seems to agree with this assessment as well. Their message is that Zimbabwe needs a bank that does not pander to the whims of the political elite.
I have said this earlier, Zimbabwe needs an independent central bank. The deeper question is: why is it all the Latin American countries and some African countries which have been through hyperinflation reformed their institutions? The first thing you do after hyperinflation is to create an independent central bank. After the hyperinflationary period a decade ago Zimbabwe hasn’t been able to put the right institutions in place.
Institutional reform will help in ensuring there is no repeat of history. RBZ needs to be truly independent so as to make independent decisions.
On the issue of currency, its debasing fundamentally is the fiscal problem. The government is spending too much money and the central bank prints money to finance the deficits. The central bank is the mirror image of what the government does. On the issue of transparency, I say we don’t need the civil society to monitor what the government does but parliament.
Why is it that parliamentarians are failing to hold government accountable to issues of borrowing money and spending it?”Patrick Imam, IMF representative in Zimbabwe
The RBZ has been known to pander to the demented whims of the government. In 2008 when Zimbabwe broke all hyperinflationary records, the RBZ meekly printed cash to finance every one of the government’s wild projects with little accountability or common sense.
When the Unity government ended in 2013, the ruling government picked up right where it had left off. Engaging in bizarre opaque deals such as Command Agriculture with zero fiscal discipline or accountability. Money supply has ballooned again as the government spends with abandon and the elite have unfettered access to the bank’s funds.
At the very least the bank should be audited at the end of each year by an independent auditor.
Paralysed/Sleeping parliament is aiding and abetting
For some strange reason, parliament has failed miserably when it comes to passing essential laws including even routine bills. The whipping system in place should ensure compliance, the ruling party has a supermajority yet only a tiny amount of bills have sailed through parliament.
There has been rather, a disturbing affinity for statutory instruments, temporary amendments under presidential powers and decrees rather than real considered legislation. It’s all pretty bizarre given the fact that the government can easily pass whatever law it wants.
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