Zim stuck in tragedy of perception

HARARE - Towards the end of last year, the Reserve Bank of Zimbabwe (RBZ) introduced a range of bond coins, a move which has been met with mixed reactions by the public.

Some have explained it as a ploy by government to cream the public off the few coins in rand and US dollar denominations, thus with the long-term aim of bringing back the Zimbabwe dollar.

This has, however, been refuted by government. The central bank has tried to clear the air on the reason why the bond coins are coming in — to deal with pricing distortions emanating from the lack of small denominations in the basket of currencies in use in the country.

However, there are some who still feel the introduction of the coins is a noble idea, albeit coming in a bit late.

Consumers had become accustomed to the forced purchasing  of unwanted items like sweets, matches, etc, in return for change due.

Retailers have been taking advantage of the setup to get customers to end up with items they had never planned to purchase in their shopping baskets.

Most people gradually had gotten used  to this state of affairs and would rather go on with the system than embrace the entirely new set of coins owing to the misconception they have in as far as monetary issues are concerned.

Perhaps there was more that the RBZ could have done in terms of educating the general populace  and raising awareness on the issue.

The advertisements carried in the press may only have served to remind people of the painful years of hyper-inflation where people frequently woke up to the announcement of new notes, which were roundly rejected across the retail sector.

In 2008, people lost all their savings at the height of the hyper-inflationary period.

Those who had taken out insurance policies were not spared as the economy suffered one of its worst plunges since independence.

The mistrust this bred between policymakers and the public following the losses people incurred has been the major source of the ordinary people’s negative perception of any new monetary policies by the present government.

Although government has promised that it would find the US-dollar equivalent to fund people’s accounts as a way of paying back what people lost when the change-over to the multi-currency system was effected, nothing tangible has been done to date.

To make matters worse, no one has bothered to correct people’s perception and as such skepticism cannot be avoided whenever a monetary policy pronouncement is made.

There is no doubt that government is in desperate need of revenue to finance its operations. Traditional sources of revenue like tax have been dwindling continuously as more and more companies closed, throwing thousands of taxpayers onto the streets.

Given such a background and in the absence of a proper awareness campaign, people are bound to come up with unsubstantiated theories.

For some time now, Zimbabwe’s economy has been haemorrhaging as a combination of corruption and poor policies, among other ills take their toll.

The semblance of economic stability realised during the era of the inclusive government has been severely eroded, with some of the major drivers of the economy registering their worst periods in years.

The manufacturing sector has been operating below capacity as capital has not been forthcoming with the banking sector shifting focus to lending to individuals as opposed to corporates.

What the RBZ and government must probably do, is go back to the people and explain the merits of bond coins.

It is better to invest in such campaigns than risk being misinterpreted.

The onus is on the central bank to go back to the drawing board and ensure important decisions are effected after adequate consultations have been made.  Such a scenario guarantees the success of whatever policy is implemented.

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