THROUGHOUT history, and throughout the world, it has been the exceptionally rare event for any government to admit fault and error.
Â Instead, whensoever such faults and errors have occurred, governments seek vigorously to deny culpability, and to attribute responsibility to others. And the Zimbabwean government has consistently demonstrated that it is a past master at doing so.
Without any regard for credibility, and in contemptuous disregard for consequences,Â Â it has unceasingly misrepresented the nature and causes of Zimbabwe’s economic ills, and has unreservedly blamed others for such ills, invariably its allegations being wholly or, at the least, almost entirely, unfounded. And, with very rare exception, it accompanies its vituperative outpourings of criticism of others with torrents of treats, including many that would, if carried out, be in blatant breach of law.
This has been particularly pronounced during the past two months, due to the combination of circumstances of Zimbabwe suffering the most severe levels of hyperinflation ever experienced by it, and forthcoming elections which government fears could emphatically demonstrate the displeasure and dissatisfaction of the population with the prevailing economic circumstances, and with government’s total failure to address those circumstances. Unhesitatingly, andÂ wholly unconcernedÂ at the lack of truth and substance therein, the ruling party’s spokesmen at election rallies, throughout the country, have repeatedly stated that the immense inflation ailing Zimbabwe is due wholly to the actions of the supposedly unscrupulous businessÂ community, and that strong punitive actions will be taken against that community. President Mugabe,Vice Presidents Mujuru and Msika, Ministers Obert Mpofu and Sikanyiso Ndlovu have all stated, on numerous occasions as the Zanu PF election campaign has progressed, that businesses and service providers have irrationally and unjustifiably increased prices not because of need, but in order to profiteer, and as a strategy to bring about regime change. Most recently, only a week ago, the president addressed a rally of supposed supporters. In his address, the president warned enterprises that have markedly increased prices that they would be amongst the first businesses to be transferred to black ownership. He cited the usual allegations of profiteering and desires for regime change as the principal motives for the price escalations, and also contended that they had been done in order to counter and exploit the recent increases in civil service salaries.
He said that in order to take action against the so-called offenders, government was identifying andÂ listing all companies profiteering at the expense of the majority, and particularlyÂ identified bakeries,Â and enterprises as were beneficiaries of concessionary facilities from the Reserve Bank. Such listing would include black businessmen who “profiteer at the expense of the majority”, but presumably such of those businessmen as are in the Zanu PF hierarchy will be “inadvertently” omitted from the lists!
It is time that Zanu PF, the presidium, and the ministers, recognise publicly that it is the manner in which Zimbabwe has been, and is being, governed that is the indisputable cause of the horrendous hyperinflation which has brought the economy to its knees, and the populace to extreme poverty, misery, malnutrition, ill-health and, in an increasing number of instances, death.
Amongst the foremost causes of the hyperinflation, in the last three months,Â has been that government forced the central bank to raid theÂ supposedlyÂ sacrosanct “free funds” accounts of NGOs, private enterprise, and others. This radically increased recourse by the private sector to the “parallel” foreign currency markets. The unauthorised “borrowing” of the legitimate foreign currency resources of Zimbabwean businesses deprived them of access timeously to their lawful funds in order to fund essential imports and legitimate foreign currency based expenditures, leaving them with the alternatives of either closing their operations, or of accessing funds in the alternative markets.
As a result, the imbalance between supply and demand in those markets intensified exponentially, enabling the foreign currency traders to escalate endlessly, and to massive extents, the exchange rates demanded for the scarce currencies. The consequence has been a gargantuan increase in production and operating costs for all businesses.
At the commencement of the year, the parallel market was operating at exchange rates of around US1: $7 500 000, and as of a week ago rates approximated US$1: $60 000 000. Thus, in 10 weeks, rates had increased eight-fold, and if businesses were to continue operating, they had to increase selling prices to cover that enormous escalation in their costs.
If government, in order to fund the elections in general, and its party campaigningÂ in particular, and to fund “free” or concessionary handouts of agriculturalÂ machinery and implements to the favoured few and to voters to be enticed to give the party support, had not pressurised the central bank to abuse the sanctity of private sector foreign exchange holdings, the parallel market-driven surge in hyperinflation would not have occurred, the survival of many businesses would not have been jeopardised, and NGOs would not be demotivatedÂ into considering discontinuance of operations.
As if this did not suffice in order to undermine an already severely stricken economy, government has also fuelled inflation dramatically by the magnitude of its spending in excess of its means, with consequential endless printing of money and, therefore, continuous and excessive growth in money supply.
Domestic debt, as at January 1, amounted to $21 trillion. By February 29, it had risen to $1,353 quadrillion! To no small degree, that is attributable to vast loans being given to defence forces personnel, in an attempt to assure their support in the elections.Â
Concurrently, with undoubted similar motivation, government has dramatically increased all civil service salaries. Admittedly, the public service has long been grossly and unjustly under-remunerated, and with ongoing, exceptionally high inflation that inadequacy of remuneration was markedly exacerbated. But funding the necessary increments by recourse to debt and printing of money, instead of by cutting-back on other expenditures, is inflationary suicide.
There have, of course, and are other courses of Zimbabwe’s tragically destructive inflation, most of which are directly or indirectly triggered by government’s actions of foreign currency expropriation and of profligacy, but almost all as are not so triggered, have nevertheless been fuelled by other governmental acts of commission or omission, or inflation itself, for inflation drives inflation to a major extent.
Persisting in unwarranted endless attacks on, and threats at businesses can only worsen Zimbabwe’s already distraught economy and hasten government’s downfall.