‘Mangudya formally devalues the bond’
By Jacob Mafume
The RBZ officially introduced a new currency despite days of denial by the Zanu PF government including the Ministry of Finance and the RBZ.
Again the Monetary statement fails to deal with the basic fundamentals, demonetizing the bond note and returning it in another name is worse.
The crisis continues, in fact it worsens, it vindicates the MDC’S position that was elucidated in the SMART Pledge, the failed military government has no alternative.
In the absence of a viable alternative, the monetary policy should have done the following:
a) Demonetize the bond note
b) Ring fence depositors funds held in existing bank accounts
c) Strengthen the multi-currency regime
d) Join the rand monetary union
e) Jettison the export retention policy.
Mangudya’s reckless monetary policy statement presents the following problems:
a) Depositors are going to lose value once again
b) Considering the rent seeking nature of our society speculation will be rife and the cost of the US dollar
c) Mangudya is not parliament he can therefore not purport to make law.
d) The government has declared an unconstitutional deadline for the use of export earnings.
e) Flood gates of litigation will open against both the government and the banks.
Only an Act of Parliament can correct the rate of the bond note set in the RBZ Act. Instead of creating the fiction of liberalizing exchange rates, the Bank should have jettisoned the bond note instead of consolidating its hard and plastic versions.
The MDC is aware that the military government wants to keep the local currency for purposes of patronage, manipulating rates, stealing real dollars earned by real exporters and lining the pockets of the connected elites.
Ultimately the rules of a currency will apply, it is a relationship between your imports and exports, in other words, the country’s trade position.
Countries with strong Trade positions have stable currencies.
More importantly, a currency is a reflection of the existence of a social contract or its absence thereof.
An abused citizen rejects the authority of the State, reorganizes economic activity outside the control of government and its currency becomes an immediate casualty. This was tested with both the Zim dollar and the bond note.
No government can rule without the people’s consent, the legitimacy question has to be addressed otherwise Mangudya is tinkering with the deck. The problems are beyond him.
Behold the New. Change that Delivers!
Jacob Mafume is the MDC National Spokesperson