By Staff Reporter
A bold move by the Emmerson Mnangagwa-led Zanu PF government to disband the much sought after United States dollar from use in favour of a new local currency has been met by outcry from the Zimbabwean community in Namibia.
The country’s reserve bank governor, Mthuli Ncube this week announced that all foreign currency, especially the US Dollar, British Pound, South African Rand, Pula “and any other currency whatsoever” were no more legal tender as per the Reserve Bank of Zimbabwe’s legal tender Regulations (Statutory Instrument 142 of 2019).
The Zimbabwean dollar has, with effect from June the 24th this week, been declared the sole legal tender in all transactions, Mthuli said in a written statement which went viral online minutes of being released.
This comes in the wake of President Emmerson Mnangagwa having promised the cash-starved nation that the country will be having its own fiat currency within nine months, rousing an outcry with most Zimbabweans in the diaspora.
The central bank has over the months been left with a few options to curb black-market currency trade that has fueled surging inflation.
But it seems the announcement came too soon for many Zimbabweans who have already been battling with a heavily devalued surrogate currency known as the Bond Note which cannot be used anywhere else in the region, or the RTGS-dollar.
The Patriot caught up with Zimbabwean expatriates in Namibia to gauge what they make of the latest developments back home.
Director and founder of Glowshot Capital, Tawanda Zhanje cautioned that the move was a recipe for disaster citing that the new currency is not backed up by anything.
“After all is said and done, this is something that is not going to work.
It is definitely going to make people’s lives very miserable. Our biggest thing is trust issues in the government. We don’t trust it so obviously they are just going to print the Zim dollar. There is going to be inflationary issues. Things will continue to go up, there is going to be hyper-inflation and they will just continue printing money,” he said.
He predicts that Zimbabwe will be a no-go area again for its citizens currently working in Namibia as “things will start disappearing from shops”.
Namibia-based Zimbabwean dentist, Richard Banda said the decision to ban the use of foreign currency simply means life will be harder back home.
“It means we who are outside the country will have to just work extra hard,” he commented adding that the inception of the Zim dollar was ill-timed.
For him the failure of the Bond notes/RTGS speaks volumes on the fate of the Zim dollar.
The RTGS$ was changing hands at about 13 to the USD on the streets on Harare on Monday, while the interbank rate is 6.32, according to Bloomberg. “Now that they have reintroduced the Zim dollar we all know what is going to happen.
It’s the same thing, whether you call it the bond note or RTGS or Zim dollar. It will just collapse. It spells doom for our brothers and sisters at home.”
The economy has just spiralled out of control. Economics are linked to politics so everything that they are doing without solving the politics is nothing. It makes sense to have your own currency but if the fundamentals are wrong it’s a useless currency. Better off using other people’s currencies,” he said.
Gordon Jay, an entertainment events organiser said he halted remitting some funds back home the instant Zimbabwe announced the move to do away with foreign currencies in transactions. “This (USD) is the medium of exchange for the public. If I do deal with someone now, whether buying a car or something like that, they will say we want our money in US dollars yet government is saying they don’t recognise it.
This makes things difficult. They should have released the new Zim dollar and we see how it performs, once that is established then they remove the US dollar. We don’t even know how that money looks like,” he said.
A multicurrency system was introduced within the Zimbabwean economy after the Zim dollar plummeted in value forcing the now deposed Robert Mugabe’s Zanu-PF into a power-sharing agreement with the Movement for Democratic Change (MDC) following an economic crush.
The 2008-2009 hyper-inflation threw the Reserve Bank of Zimbabwe (RBZ) into a money printing binge which brought to the fore notes in the form of billions and trillions of Zim dollars.
These proved worthless paper on the market and were consequently flushed down the drain. The 2008 hyper-inflation reached a record 231 000 000% high. The basket of currencies brought the needed relief as Zimbabweans could now afford basic goods on the shelves while traders could easily import from South Africa. This time around, currency speculators in the informal economy have devalued the Bond notes so much that a teacher’s salary was said to be equal to nine tins of jam or a Russel Hobbs branded iron.
The currency situation became so untenable that the People’s Own Savings Bank (POSB), a government entity, recently issued a statements to the effect that its workers could no longer afford transport.
The country’s biggest university, the University of Zimbabwe (UZ) also notified that its lecturers were opting to sleep in the students’ dormitories to avoid transport fares and pleaded to be helped with fire wood to cook their meals. According to Bloomberg, the new Zim dollar may stabilise inflation.