One of the biggest problems Zimbabwe has faced over the years is that of policy reversals. One observer even joked that President Mugabe is a very generous man. He always fulfills the wishes of the people (zvido zvavanhu).
War veterans asked for compensation and they were given. People asked for the land and it was delivered. They complained that structural adjustment was hurting them and it was suspended. Someone complained that bureaus de change were fuelling the decline of the Zimbabwe dollar and they were closed.
But the nation is paying for all these impromptu decisions. Indeed, while there had been a raid on the Zimbabwe dollar and bureaus may have had something to do with it; the major reason for the collapse of the local currency is simply that people have lost confidence in the currency. They see no point in saving it when inflation is nearly five times the rate of interest on savings.
People have abandoned the money market in favour of foreign currency, property, vehicles and equities. While all fundamentals were pointing in the wrong direction, the stock market soared to record levels, rising 168 percent for the year at one time, before this was scuppered by the 2003 budget.
Though property prices have skyrocketed people have continued to buy houses and to build mansions. This is a way of investment as most people are not getting the money from banks or building societies. One student even argued that there was no point in saving money when a two-plate stove that cost $16 000 two years ago now costs $230 000. In other words, people are asking if one had invested $16 000 what type of investment would have earned them $230 000?
Savings are out. The equity market, perhaps, but buying and selling property or items is the in-thing, so people go into that. Definitely if someone had bought the greenback worth $16 000, two years ago, at the then black market rate of around $80, they would have bought US$200. A month ago that would have been at least $280 000. Even with the conservative estimate of the dollar having declined to $600, it would still be some $120 000, guaranteed, no risk.
The number of four-by-fours on the streets, clearly shows that something is terribly wrong with our currency, especially considering that these vehicles are costing in excess of $20 million. But hard currency remains the smartest option. And while some sections of the media are hailing the new measures as a success, they are conveniently ignoring the stark reality that the currency is appreciating because there is an oversupply as people working abroad are returning home for the festive period.
Even laymen are saying that anyone who can afford should buy foreign currency now because when schools open in January, the rates could rocket. The international monetary fund has predicted that the dollar could fetch as much as $3 000 by next year.
Closing the bureaus will not change anything. The doors might be closed but business will go on as usual. In fact, because of the risk involved prices might soar. What should be abundantly clear to the authorities is that it is not the buildings that cause the currency to collapse. It is not saboteurs. It is not business people. It is the people.
Right now it is widely accepted that Zimbabweans working abroad are pouring more foreign currency into the country than the entire economy is generating, not just the export market, but the entire economy. And with the politics of patronisation that ZANU-PF plays who would want their currency to be used to enrich a few, who have not sweated for it?
And why is it that drastic measures are always taken when senior ZANU-PF or government officials have already made a killing? The Willowgate scandal was exposed after ministers or their close associates had already got stinking rich. All those implicated in the scandal are still tycoons.
The concerted land reform programme was only embarked on after all the top officials already had prime farms.
The bureaus are being closed, probably because those at the top have already made enough.
When are we going to have decisions that will benefit the people and not a few individuals?