RBZ Monetary Policy Statement: Heist Happens Again

Reserve Bank Governor John Mangudya with Minister of Finance and Economic Planning, Mthuli Ncube (right) [Image credits – Zimbabwe Situation]

By ZimSentinel

The Monetary policy statement from the Reserve Bank of Zimbabwe (RBZ) Governor combined with the Minister of Finance’s  fiscal measures essentially throws Zimbabweans to the dogs of avarice. Let me take you back quickly to the year 2015, the year the Zimbabwe local currency was demonitised. At that time the Zimbabwe Independent newspaper Headlined: Demonetisation: The end of Zimbabwean dollar”  the article in question published on the 26th of June 2015 gave the following explanation:

“Demonetisation is the act or process of removing the legal status of a currency unit. It is necessary whenever there is a change of national currency. The old unit of currency must be retired or decommissioned.”

“Demonetisation is not compensation for the loss of value of the Zimbabwe dollar due to hyperinflation. It is an exchange process. Let’s hope that we have learnt valuable lessons from the period of hyperinflation.”

As a matter of fact, the people of Zimbabwe bore their losses of value during hyperinflation and during the crossover (demonetisation).  Whatever balance they had in local currency in the banks were exchanged for USD or Rands or other foreign currency in the Multi currency regime. Therefore at that point in time nobody had local currency balances and everybody had a floating balance to any currency in the basket of circulating currencies and chief of these currencies was the US dollar. Fast forward to 1 October 2018, a mere 3 years after demonetisation.  Your balance has suddenly been swapped for a worthless bond note by mere announcement via monetary policy statement. Its called a Heist.

It is criminal! If you check your eco-cash balance it says US$xx. Why? Because at demonetisation that became the base currency for all balances and all other currencies in the so called basket became just quote currencies.

The government thinkers who have been ensconced in the corridors of power for the longest time devised a plan to evade the acknowledgement of your balances in the bank which today sit at over $8 Billion which should be US$8 billion. Through theft and horrifying aggrandizement, the man and women charged with leading this country have used every trick and contraption to steal from the people. Not once. Not twice, but over and over again. By bloating government expenditure on wasteful and fruitless expenditure the government has, through issuing billions of  Non-USD denominated treasury bills,  caused runaway inflation and  created a local currency by any other name, hence the latest measures.

We are back to 2008 in no time. None of the policy measures announced by Professor Ncube have anything to do with mobilisation of resources for the private sector in order to kick start productivity, which is essential for job creation and stabilisation of the economy through earnings. He is rather concerned by “widening the tax base”.  In other words, his foremost concern is raising more money for a government known for indiscipline. Yet the people of Zimbabwe are already over burdened by tax. Add the following and check what is left of your income  if you pay circa  25% PAYE +3% Aids levy +15% Value Added Tax + 2% Funds Transfer tax plus plus plus. On average government is taking away from you directly and indirectly some cumulative minimum of 45% in taxes.  Ot’s a case of fifty fifty with government at a minimum. Good luck!

Not only the ordinary citizen  has been affected. Even the very mining sector that must be made attractive to investors the has been kicked in the teeth, with gold miners being only allowed to keep a mere 30% of their foreign currency earnings. How is this industry is supposed to resuscitate with this measure? One wonders. It’s also pity for the tobacco farmers who will stew with 80% of their crop’s worth being paid out in bond notes.

Under these circumstances I ask: do we have a local currency or not? Is it crypto or It’s cryptic!

Leave a Reply

Your email address will not be published. Required fields are marked *