Letter from America:with KENNETH MUFUKA
Every Saturday morning, especially when the weather is beneficent, I take a copy of the Big Saturday Read by the supreme brother Alex Magaisa to my garden chair and settle myself with some expectation.
One of the morsels of this week was a spicy question, raised by Senator Morgan Femai. “What is the government policy concerning a minister who is failing to perform to expectations? Is it true that they are fired?”
“When will Finance minister Mthuli Ncube be fired?” The senator went on in ignorance of the fact that he was asking an “illegal question.” (Zimbabwean English)
Femai was referring to the rapid re-dollarisation happening in the Zimbabwe economy and the consequent loss in value of the Zimbabwe dollar. I will, with the senator’s permission, attempt to educate him on government policy and why Ncube is a hero.
Please, I beg our readers not to mention my name. This stuff is highly illegal talk. Zimbabweans are easily impressed with much learning, erudition and the liberal use of insufferable big words. Brother Ncube had all of this, with a surplus. He came from Oxford where he was teaching the white men econometrics, whatever that means.
With such an impressive background, he uttered these prophetic words: “The bond note currency is bad money and we know in economics bad money drives away good money.” (August 31, 2018)
The bond money was a fake Zimbabwe dollar concocted by the Reserve Bank, on the fake assumption that users would pretend it was valued at par with the US dollar. All the king’s wise men pretended. Only babes and clowns saw that the king was without clothes.
As Ncube became Zanufied, he changed course, but kept his big words and erudition. The bond note, he argued, on June 30, 2019, was quickly being exposed, the economy was re-dollarising (towards the US). So far so good. Two months before, the IMF had “agreed on macroeconomics policies and structural reform that could underpin a new Staff Monitored Programme.” This process would precede the return to the Zimbabwe dollar.
In simple English, the proposed actions determined to be necessary support for a re-introduction was not done. Ncube, as long as he used big words, pretended he knew “stuff” government went along with him.
By setting the value of the Zimbabwe fake dollar at 2.5 as opposed to the US$1, he challenged the universal law — the truth will out. That was June 30, 2019.
King has no clothes
Ncube adopted the Zimbabwe dollar against his own earlier advice as shown above and hoped against hope that he would not be found out. August 26, he gave a press conference to the BBC. Zimbabwe must address first its domestic debt. “The issue of domestic debt needs to be dealt with through government expenditure patterns”, which he later called fiscal discipline.
So far so good.
International debt also needed urg
ent attention. Zimbabwe was in the category of a highly indebted country and was suffering from fiscal distress. This creditors, under certain conditions to be agreed upon, could consider “debt forgiveness” or offer some “relief” which I interpreted to mean re-arrangement of payments at lower premiums. Thirdly, and this is typical Zanu thinking, Zimbabwe deserved a “sui-generis debt relief approach” by its creditors.
Brother Femai, don’t be bamboozled by big words. Sui generis means that Zimbabwe is in a special category of its own. Please hold your breath. It is that thinking, that the world owes us a living, that has been the death of Zimbabwe.
Mthuli was making this “big noise” August 26, 2018, during President Emerson Mnangagwa’s inauguration. This is what endeared him to Zanu leadership.
But hold on for some more. While Zimbabwe is special (I do not know why), it did not carry out the “conditionalities” set out by the IMF nor the political reforms imposed by the US as a condition for lifting economic sanctions.
So, we are special, we want special consideration, but we do not agree when these countries impose special conditions for relief.
Senator Femai, I am sorry to have used long words in this letter. I could not avoid them because the Zanu PF approach to problems is through mystifying them.
Nevertheless, the fake money introduced as the Zimbabwe dollar was soon found out. Zanu PF often forgets that there are universal laws that apply to all humans. One of them, which Ncube himself confessed (as shown above), was that fake money will drive away good money.
Prices, I am sorry to say, have not changed since the introduction of the Zimbabwe fake money last June.
I have a list of prices from the United Kingdom. A bag of cement still costs US$8.50 (in Zim: $120) , a chicken costs US$5 (Zim: 100), petrol per litre US$1.50 (Zim: 20) and so the charade goes on.
The Zimbabwe fake dollar is losing value as more and more citizens realise that the king is naked.
Ncube’s original value of the Zimbabwe dollar to the US was 2.5 to US$1 (June 2019). On January 30, 2020, the laws of the universe had degraded the Zimbabwe dollar to 24.50. On February 20, it was further degraded to 28.6 and on March 10, as I write, its degradation has reached 36.5.
Senator, I was avoiding to tell you that the degradation is, in fact, much higher at the Old Mutual Implied Rate (OMIR), which is 36.6. The Zimbabwe dollar is worth three pennies or thereabout.
Peace be with you.
l Ken Mufuka is a Zimbabwean patriot who writes from the US. He spent 10 years researching Life and Times of Robert Mugabe, Dream Betrayed, available in Zimbabwe at INNOV Bookshops and in the world at kenmufukabooks.com