Zimbabwe’s Finance Minister still thinks things are fine and dandy in the teapot-shaped Southern African country even though more than half the people in the country live in poverty and there are mealie-meal shortages in supermarkets. Also, the fact that we have one of the highest inflation rates in the world did not seem to deter him from using his trademark phrase-zvinhu zvese zvakarongeka [all is well]. He also denied there is a an economic crisis as he spoke to journalists after a recent post-Cabinet meeting.
What crisis? We are performing well. We have put measures in place to fight inflation, people should not panic, everything is in order, zvinhu zvese zvakarongeka (all is well).
We have embraced the US dollar, but have also embraced our own currency, the Zimdollar, so there is no rejection of the US dollar.
So, this is what will happen on day one if you adopt the US dollar as your currency, something very nasty will happen.
You will wipe out the entire banking sector because you will have to convert the Zimdollar balances into US dollars.
The banks will have a negative balance, you will have a crisis; a cash crisis because you cannot print US dollars.
The advantage of having a domestic currency circulating along (the US dollar) is that we have been able to manage the cash shortage situation which we have been through before.
The economy, especially the manufacturing sector, will immediately lose its competitiveness against foreign products.
We will then have to do away with monetary policy, you cannot have a country that has no monetary policy, but only has a fiscal policy.
Mthuli Ncube on the economy and dollarisation as a solution
Ncube the ostrich
This is a tried and tested second-republic tactic. While the first republic under Robert Mugabe liked to diminish people’s economic pain, the second republic has made a commitment to denying everything and anything. They will not even acknowledge the Zimbabwean economy is in trouble. They keep parroting stuff like “the economic fundamentals are sound” and “we are on track” without really explaining what they mean. Like the proverbial ostrich, they have their heads stuck in the sand and are determined to keep things that way.
For the avoidance of doubt, there is an economic crisis in Zimbabwe. The bulk of people is struggling to afford staples like maize meal, flour and cooking oil. That’s if you can even find them in your neighbourhood shop. Those items are now being priced exclusively in USD in most shops even though the bulk of employed people and civil servants mostly earn RTGS. Even the official rate is galloping after the black market rate putting to rubbish claims such as the black market rate is driven by speculation.
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