Zimbabwe’s Foreign Currency Quagmire And The Plight Of The Citizen

In our Bulletin 11/2021 titled, “Fall in RTGS Value and the Decimation of Livelihoods”, we highlighted how the fall in RTGs value continued to threaten the livelihoods of the vulnerable sections of our population. Because of decades of economic hardships, this section of our population which lives in extreme poverty has increased phenomenally. In this Bulletin we use the case of ordinary people’s experiences with the recently introduced bureau de change to add the citizens’ voices in  further illustrating the inadequacy of the government’s piece-meal measures introduced to deal with what Ringisai Chikohomero, a researcher with ISS Pretoria has called “the currency quagmire” (Daily Maverick, 19 October 2021). In doing so, we call upon the relevant government authorities to come up with comprehensive currency measures to cushion the suffering masses from the debilitating effects of currency volatility. History has, through Gidion Gono’s “currency engineering antics”, taught us that tinkering with the peripheral without addressing core fundamentals will not lift the country out of the currency quagmire. In Oliver Mtukudzi’s words of wisdom, “tsvaka chikonzero chaita musoro uteme” (go beyond symptoms to get to the real problem).

The currency exchange debacle has haunted Zimbabwe for some time now. The crisis can be traced back to the turn of the century and it climaxed in 2008 leading to the abandonment of the Zimbabwe dollar and the adoption of the multicurrency system a year later. However, even this did not effectively deal with the problem, which later raised its ugly head with a vengeance after the end of the GNU in 2013. Since then the currency regime has invariably continued to be volatile. Even the fall of Robert Mugabe in November 2017 and the coming to power of Emmerson Mnangagwa as the new president did not bring finality to currency volatility and the challenges it spawns. This is despite the fact the new Finance Minister, Professor Mthuli Ncube told the whole world that his immediate task was to stabilize the country’s currency among other interventions to ensure economic recovery. Among a plethora of “adopt and abandon” measures taken by the Treasury and the central bank to tackle the currency quagmire is the Foreign Exchange Auction Trading System meant to facilitate the allocation of scarce foreign currency initially to big businesses before it was extended to SMEs and individuals. The abuse of this system by well-connected companies is well documented and therefore does not need any repetition here. What we are concerned about in this instalment is the effectiveness of measures put in place for the general transacting public to access  foreign currency.

It is now some months since the government re-introduced a bureau de change to sell USD to the general members of the public. In celebrating the policy, the Information Permanent Secretary Nick Mangwana tweeted that “the RBZ has made life easy for people by liberalising the purchase of small value foreign currency amounts of up to US$50 per person per week from bureau de change at the auction rate.” The question once again is, how far is the life of the ordinary person easier as claimed by Mr. Mangwana? The experience of the citizens as they try to access this facility has been a torrid one. One only needs to see circulating pictures of ordinary citizens sleeping on pavements as they spend nights in queues to see that contrary to Mangwana’s celebratory tweet, for most Zimbabweans the suffering continues! It is distressing to see men, women, the old and the young huddled together as they wait for their turn to access a measly US$50 a week. This is not to mention how this exposes them to the deadly Covid-19 virus. As citizens we ask, how long are we supposed to suffer from the government’s failure to come up with a comprehensive policy to tackle the deep-seated currency crisis whose historical roots go back to more than twenty years ago? We will not go into another electoral process without substantive resolution to this fundamental challenge affecting all facets Zimbabwean society.  Until this question is answered we will not tire in asking: How far?