When finance minister Patrick Chinamasa, then in acting capacity, announced that foreign currencies were to become lawful tender alongside the Zimbabwe dollar on January 29 2009, there was a huge sigh of relief across the country, particularly among ordinary citizens who had for long endured the pain of the hyper-inflation and black market era.
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This fiscal policy was substantiated a few weeks later by Tendai Biti who in his revised budget statement before Parliament on March 17 further announced the scrapping of the Zimbabwe dollar, arguing that the currency was already moribund and would have distorted the market had it been maintained.
As was largely expected, this policy announcement was received positively and there was a great sense of optimism that the country’s decade-long socio-economic and political challenges were finally being addressed and that the country was on a recovery path.
For all it was worth, the two main political parties — Zanu PF and the Morgan Tsvangirai led Movement for Democratic Change (MDC-T) — jostled to claim credit for introducing the multi-currency regime and the subsequent economic recovery gains.
Indeed, the policy of introducing foreign currencies as legal tender and the scrapping of the Zimbabwe dollar brought about notable positive developments.
For starters, there was the end of hyperinflation. By June 2009, month-on-month inflation had fallen below 1% and at the end of that year Zimbabwe had the lowest inflation on the continent. As a matter of fact, during the Government of National Unity (GNU) annual inflation averaged less than 4%, a far cry from the days when the country would record inflation as high as 500 billion percent.
In addition, food and basic commodities became readily available at regionally competitive prices, which was a departure from the years of empty shelves and use of bricks of valueless bearer cheques.
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Apart from food availability and steady inflation, the GNU successfully expanded the economy, with the Gross Domestic Product (GDP) recording a 5,5% growth in 2009. The growth trend continued during the first two years of the GNU and statistically, Zimbabwe became one of the fastest growing economies in the world, expanding by an average 9% a year.
For good measure, civil servants were paid on time and government realised more revenue from income taxes from both individuals and corporates as well as from Value Added Tax (VAT), which reflected an upsurge in economic activities, unlike the 2008 era whereby the government’s purse largely relied on excise tax.
As a result of this expanded economy and support by international donors, government was able to resuscitate some social services, including improving public health and education services. It was remarkable to note that the country experienced fewer deaths of mothers and infants, the prevalence of HIV declined and there was enhanced access to textbooks in schools.
These socio-economic gains cumulatively contributed to political stability within the country amid decreased cases of politically-motivated violence and the successful writing and adoption of a new constitution.
The three main rival political parties had created various dialogue platforms, including the Joint Monitoring and Implementing Committee (Jomic), the Parliamentary Committee on Constitutional Reform (Copac) and the Organ for National Healing.
Outside of these formal channels, we are told that the leadership of these political parties, otherwise known as the principals of the GNU, President Robert Mugabe, former Prime Minister Tsvangirai and former Deputy Prime Minister Arthur Mutambara would hold tea and pancake meetings every Monday.
Given the heightened polarisation and political intolerance in the country since the formation of the MDC, the cordial relationship built among the political protagonists — whether it was genuine or disguised — painted a bright picture of the country.
After all, this political transformation was not only yielding results for the elite but for the generality of Zimbabweans who benefitted from the opening up of the media, especially the print media sector, an expanded bill of rights in the new charter and the establishment of the Constitutional Court, to mention just a few incremental gains.
As Zimbabweans were celebrating these milestones, no one took time to heal the wounds suffered by the general populace during the Zimbabwe dollar era and no one cared to exercise caution prior to the formalisation of the use of foreign currency as legal tender.
More significantly, no one had the heart to compensate for the severe losses that law-abiding citizens incurred in 2008 when Zimbabwe’s inflation reached unprecedented heights.
People lost their hard-earned savings, pensions and investments.
While the national healing and reconciliation process spearheaded by the parties to the GNU largely focused on fostering peace and political tolerance in the country, no one addressed how the losses of hard-working Zimbabweans were going to be compensated.
Some may argue to the contrary and point to the call by the Reserve Bank of Zimbabwe (RBZ) to redeem the then worthless bearer cheques and the meagre US dollar amounts credited to bank account holders as some form of compensation, but I humbly submit that all efforts to address the economic crisis of 2008 were superficial.
This is the main reason why any adult Zimbabwean has neither forgiven nor forgotten the pain and trauma suffered as a result of these losses and any hint of returning to that era sets alarm bells ringing.
I would also humbly submit that this is also the reason why the cash crisis soared upon the bond notes monetary policy pronouncements. A good number of people, who have been burnt before, are not taking chances and are demanding their deposits before the arrival of the bond notes.
As such, calls for the banking public to use the options of Point of Sale (POS) or Real Time Gross Settlement (RTGS) are falling on deaf ears, not because the calls are negative per se, but because people want to safeguard their earnings and savings, no matter how huge or small there could be.
One primary human need is security obtainable by trust and because the economic crisis which heightened in 2008 was not adequately dealt with to inspire consumer confidence, people are bound to panic at the slightest mishap.
Hence, the RBZ needs to realise that the panic and daily maximum cash withdrawals are not necessarily suspicious activities by money launderers but by individuals with traceable sources of income and wealth preparing themselves safety nets.
They want cash in a trustworthy currency and are preparing themselves in case the move to introduce bond notes turns catastrophic.
The people haven’t forgotten the suffering that heightened in 2008 and sadly, no one healed the wounds. l Feedback: [email protected]
