Today marks two weeks from what can only be described as the shock announcement that terminated the multicurrency era, rebranded the RTGS dollar to the Zimbabwean dollar and freed the interbank market exchange rate. Since then we’ve seen prices go both up and down, the parallel market rate decline only to rise again, isolated incidences of banks offering rates far beyond the parallel and most of all confusion in the country as to where exactly we are going. Well if Finance Minister Professor Mthuli Ncube is to be believed we have seen the last of these shock reforms.
In an interview with state-run Business Weekly, The minister said Zimbabwe would not see any further major reforms in the currency space as the intended reforms had been carried out with only what he called the minor matter of printing Zimbabwean dollar notes to replace the bond notes being the outstanding issue.
The minister went on to say that they had to move swiftly when scrapping the multicurrency era because moving slowly was going to cause uncertainty. In all honesty, uncertainty is still being experienced regardless of how swift the move was because it still unsettled a system that had been working for 10 years. Incidentally, the biggest problems in the system were introduced by government policies.
The interview which was conducted on Wednesday 3 July also quoted the minister as saying that we had seen sanity in the parallel market. Perhaps he spoke too soon as the parallel market has resumed an upward trend and this time taking the interbank rate up with it. Our authorities seem to spend more time concentrating on the exchange rate than worrying about the factors that determine it.
While I’m sure the finance minister means well and wants to assure stakeholders of no repeat of such shock tactics he must take cognisance of the fact that he is not the person to believe in such matters. The day prior to the introduction of Statutory instrument 142 of 2019 which ended the multicurrency system he hosted international journalists and correspondents and told of plans to reintroduce the Zimbabwean dollar down the line.
Furthermore, the government through its efforts to be seen to be more open to people has in fact exposed itself more. New Energy Minister Fortune Chasi’s blatant lie about the government having paid Eskom on behalf ZESA only to surface days later with a receipt showing a later date is the most recent example in a serious of calamitous utterances by the government.
While businesses large and small are reeling from the last announcement it is our deepest hope that that the words of the minister would for once ring true. Of greatest concern is the fact that the changes brought about by the return of the Zimbabwean dollar have been very short lived. The ordinary individual can only still purchase foreign currency on the parallel market which together with the interbank market is on an upward trend. If this goes unchecked either prices of goods will move or the goods themselves will move off the shelves.