'Adopt rand to curtail price increases'

HARARE - Zimbabwe must drop bond notes and adopt the rand as the major instrument of trade after prices of imported commodities from South Africa shot up by more 1 000 percent between September and October, former Economic Planning and Investment Promotion minister Tapiwa Mashakada has said.

The main cause of price hikes is the deepening shortage of foreign currency, at a time demand, by far, outstrips supply.

Mashakada said this has created a breeding ground for corruption, with importers connected to the corridors of power getting forex at the official rate while other importers have to resort to exorbitant parallel market rates.

“The recent exposure of the parallel market forex trading involving the Reserve Bank goes to show that the ruling party and its government deployees are solely to blame for the current economic hardships Zimbabweans are facing,” Mashakada, who is the MDC secretary for finance and economic affairs, said.

“The economic crisis is self-inflicted. Yet wages and salaries are fixed. An ordinary civil servant earns an average salary of $300 bonds in form of RTGS or virtual money which by the way now attracts 2 cents charge for every dollar,” he said referring to a new tax on money transfers partly blamed on a spike in prices.

“This means that wage earners, the majority of whom are civil servants, are now sinking in poverty.

“From a disposable income point of view, wage earners are trapped in poverty and are on the verge of starvation. Households are resorting to one meal per day. It’s like fiction but this is happening in Zimbabwe.”

Mashakada said this poverty was juxtaposed against a new breed of politically-connected money barons who he said “are known and are involved in money laundering and illicit financial flows.”

“These are not arrested and they import luxury goods including state-of-the-art vehicles under the watch of monetary authorities. This is called state capture by all measures. Therefore, the current economic crisis has been fuelled by corruption and avarice.

“Its roots of course is a confidence and legitimacy crisis caused by the contested harmonised elections of July 31,” the senior MDC official said.

The Constitutional Court confirmed President Emmerson Mnangagwa’s disputed July 30 election victory on August 24, brushing aside an opposition challenge that has left the nation polarised, with Nelson Chamisa, who leads the opposition Movement for Democratic Change (MDC), branding the elections “the theft of the century”.

In a unanimous ruling of the nine judges of the country’s top court, Chief Justice Luke Malaba said Chamisa had “failed to provide direct and substantial evidence to allegations of vote rigging, which would be sufficient for the court to invalidate the election (results).”

Quoting a famous saying by American statesman and a retired four-star general in the United States Army Collin Powell that “Capital is a coward” suggesting it flees from corruption and bad policies, conflict and unpredictability and shuns ignorance, disease and illiteracy, Mashakada said the implosion in Zanu PF was accelerating the economic collapse.

“Economists know very well that capital is a coward.

“The implosion in Zanu PF does not help things. It is now very clear that there is no cohesion within the top echelons of Zanu PF.

“There is a leadership crisis which eating Zanu PF from inside like a cancer. Its a fierce contestation about controlling the soul of Zanu PF.

“It’s again a factional fight. On the other hand, there is a strong bourgeois class that curries favours from politicians and survives of rent seeking, clientelism,
arbitrage and tenderprenuership,” Mashakada said.

He said in order for Zimbabwe to move on again, it must “decommission the bond note and arrest parallel market arbitrage.”

“Adopt the rand as dominant or proxy currency and denominate prices in rands,” Mashakada said, “If the above cannot be done, then government has no choice but to involuntarily introduce local currency..”

He also called for the dissolution of Cabinet and enter into negotiations on a “Political-Economy Accord”.

He said the envisaged Political Economy Accord will address national convergence, political legitimacy, emergency economic recovery measures based on currency reforms, emergency humanitarian intervention and establish a “Transitional Authority” to “vaccinate against an indecisive government that is dysfunctional due to factionalism based on the race to control the key economic pillars.”

“This is quite different from the factionalism under the Mugabe regime which was about political hegemony.

“This time the factionalism under president Mnangagwa is all about economic hegemony.

“Who gets what and who controls what, is the question,” Mashakada said.

Comments (7)

Cde ED vane rushambwa,munyama mukuru.Chese chavaita hachibudirir.The Xim econonmy ichaonesa moto.

Cde kikikiki! - 5 November 2018

Meanwhile the vultures circle and gleefully celebrate as the economy implodes.

The Beautiful ones are not yet born - 5 November 2018

Ncube must do the right thing before its too late - resign.

Short road - 5 November 2018

The only thing that our leadership should do is that one thing they know very well but keep refusing to do for fear of losing the opportunities to steal and enrich themselves, that is , letting those technocrats they employ to turn around the economy , work freely without any political manipulation. But ED and those criminals around him will not do that one reasonable thing necessary for the development of the country. We have been the laughing stock of the whole of Africa because of these thieving and corrupt so called bigwigs. Shame on you.

John D - 5 November 2018

The underlining problem is bad governance, a bleeding ground of rampant corruption and lack of accountability. Moreover the Junta isn't a government of the people and it doesn't care about the citizens as long as their families and sympathizers are enjoying the spoil. The political landscape isn't attractive and it doesn't matter which currency you adopt it will be the same. The economy has virtually collapsed and there is nothing left to support whatever currency you may come up with, How you have been pricing your goods and services is very wrong. In simple terms the pricing mechanism in Zimbabwe lacks merit. The main drivers to Zimbabwean economy is internal harmony, independent Judiciary, free and fair elections, non allied ZEC, Independent Reserve Bank, abolition of barriers to foreign investments, electoral reforms. As long as people feel that elections were rigged the same it will be with the International community and the country remains isolated. Zimbabwe belongs to all blacks and whites, so live in harmony. What did you do with billions poured by the UN to combat cholera but people are still dying

Eddy - 6 November 2018

Well while I do agree with Mashakada on some of the issues he raised on the above article, I turn to disagree with him on his suggestion of legitimacy and what he termed Political Economy Accord. I dont see where the adoption of a Rand meet with those suggestions. If mdca has the people at heart as they perceive, they could have been the first to call for a working together road map. But because they are just a bunch of selfishness individuals they continue to divide the very nation they lie they represent. Until mdca regard us ZANU PF supporters as people of this country who have the mandate to choose their leaders like their own party supporters choose them, then we can move forward together as a nation. But this thing of believing that only those who support mdc are more qualified to choose a legitimate leader, we will not move an inch forward. If legitimacy means chamisa win, then it must have another meaning in the dictionary. Your suggestion Mr mashakada was spoiled by those statements hence are now null and void.

shunguhadziurayi - 6 November 2018

I thought Mr Mashakada and the Daily News were well versed on how the Rand Monetary Union works, yet, dololo! It's only parroting! Every reasonably educated person in the areas of international and regional relations knows that no country can join the Rand Monetary Union without the support of own legitimate currency. A simple bechmark exercise will show that Botswana; Namibia; Swaziland; and Lesotho all have their own currencies operating alongside the rand, Come Mr Tapiwa Mashakada and the Daily News - you can't be this dull!

Mhofu Chaiyo - 6 November 2018

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.