One of the things I have been willing to repeat over and over again to whoever is willing to listen or read is the fact that it wasn’t the MDC, ZANU PF or the RBZ that dollarised the economy back in 2009. Despite what each one of these people will tell you.
People simply adopted the multicurrency system by themselves. By September of 2008 the economy was completely dollarised even though using or even carrying foreign currency was illegal. RBZ, just like now was pushing, the idea of FOLIWARS (Foreign Exchange Licensed Warehouses and Shops).
Under this scheme, 1000 businesses including fuel importers were allowed to sell in forex while the rest were condemned to accepting the worthless Zimbabwean dollar which was ravaged by inflation. Just like then these businesses were owned by the elite who sat on their boards.
As monetary authorities, we will remain steadfast in our efforts to innovate and find practical solutions to the challenges we see on the ground.
It is imperative to note that the current measures are neither a condonation of nor a direct introduction of the dollarisation of the economy.An obstinate Gono announcing the measures
The wider public and business community was not amused to say the least. From this point on dollarisation just accelerated. In the end at the beginning of 2009, the government finally ratified the reality that had been on the ground for a long time by passing a law accepting the Multicurrency system.
Just like now the main motivation for this delay was driven by the government which was desperately trying to avoid paying their wages bill in foreign currency. The elite wanted to keep wealth to themselves dollarisation decimates arbitrage opportunities and would mean fiscal discipline and an end to unfettered money printing.
So instead of ripping off the band aid they would rather allow a few businesses under the flimsiest of justifications the privilege of selling in forex. Just like back in 2008, this will not stand as we start to see more and more businesses demanding in foreign currency.
So far the most noteworthy businesses that have been accorded the opportunity include:
- Fast food chains (because they cater to tourists like seriously)
- ZESA (so productive businesses can receive guaranteed power supply)
- ZIMRA (lots of nonsense on this one)
- Hotels (the tourist stories again)
- ZINARA (so those who loot can get their loot in a stable currency)
- Passport Office (so you can get your passport on time)
- Fuel stations under the Direct Fuel Import scheme (DFI)
- A lot others we have missed here
In some board rooms and in the minds of informal businesses this will be seen for what it is, favouritism and a tacit admission that the Zimbabwean dollar is a failure. As long as this is allowed to stand then the RBZ can pass all the directives it wants but those illegally selling in foreign currency will not stop.
Again the vulnerable in society are abandoned and have to fend for themselves in such an unequal world. Wise to this fact rural vendors have also started charging in foreign currency.
Many people figure that just like Gono, John Mangudya and his principles will eventually accept the inescapable, de-dollarisation has failed mostly because the RBZ is spineless and cannot equally apply the rules.