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Dear M’2%li…. I respond to stimulus not command: A letter from the economy

By Chenayi Mutambasere

How excited I was when I was told you were interested in me. Your credentials were a breath of fresh air it was good to finally be placed in the hands of someone who had such an active interest in studying what I was about. A fully fledged professor from a world renowned university.

Chenayi Mutambasere
Chenayi Mutambasere

I was ready to forgive your past transgressions at Barbican, banks are complicated it takes two to tango i thought maybe that wasn’t entirely your fault. Alas 12 months in and I regret the day we met. Inspite of the fact that I continue to humiliate you publicly you keep insisting on making it work. I have decided to write to you explain what I need and why you are the wrong one for me .

You see for us to work I need to know that my family feel welcome . My close relatives Investors are not happy at all. You told everyone that you would get rid of corruption . The last guy tried to kill me with corruption in fact I was in resuscitation when you arrived on the scene. He had allowed corruption to take more than 15 billion (usd)dollars from me i was on my knees. He even tried to present me with a large sized bin as a peace offering but of course that didn’t work.

When I say corruption I mean for instance when you allow your friends to insist on being given shares to allow investors to trade in Zimbabwe. Trading companies should be considered purely on financial merit and equitability for the nation.

Corruption also happens when your friends give out tenders to their friends to deliver business that no one knows about to the tune of millions of dollars . Your Zanu PF friends are bleeding me dry and you know that , but it hurts me to know that you are happy for them to carry on. For as long as this carry on , investors want nothing to do with us.

I hate that you just decide on things without consulting others that care about me . You introduced an arbitrary 2% on all ecocash transactions. What this means is you are reducing the money available for people to spend. This is another contractionary measure which chases away investors why would I start a business in a country where people have no money to spend because they are paying taxes.

My ex Tendai Biti fought to save me in court he knew that the 2% tax is both unlawful and contractionary. Thinking back TB was really the only one to understand and defend my honour even to this day. The courts upheld his argument against the 2% tax and agreed that it was unconstitutional for it to be applied but you decided to over rule them.

You can’t take the law into your own hands. Investors hate it when you do that it shows that you have no respect for the law and the risk that that presents to them is too high. Investors want to know that there is a just system in operation and no-one is above the law. If someone takes their assets unlawfully they want to know the courts can decide on the matter . A just system where no-one is above the law is a safety net for investors.

Another damning decision you made arbitrarily was insisting on the use of local currency. You were fully aware that we didn’t have an official single local currency. As long as we are importing basic commodities or their raw materials there is always a demand for forex either rand or usd.

Without an official local currency how do we trade in international markets without access to forex. So you can’t just insist people stop using forex, I respond to market forces of supply and demand. Your policies need to stimulate demand for local currency(s) by increasing investment potential.

When I first met you, you were saying all the right things including that you knew that bad money chased away good money. A year later and you are insisting on the use of bond notes, rtgs and ecocash when you know full well this is the bad money in the economy.

Bond notes were introduced because the government used the people’s money to clear national debt with no plan of recovering this money . The country was promised that the economy would recover and the bond notes would be replaced with real money . But you are now formalising this proxy money and insisting on its use.

As predicted since the announcement in July (‘Some hints and tips as we welcome the Mthuli Dollars’) the local currency has gone into freefall. At the time of the announcement the rate of ecocash to usd was 1:10 and on Friday it had gone as high as 1:24.

After all this it begs logic why you are now announcing that you want the Bureau houses to restrict the buying of USD . Thus further insisting that we use proxy money over the USD. I know you are saying this to once again try to command a demand for local currency. This wont work.

By putting restrictions on the Bureau houses you have given the black market a golden hello. The market requires foreign currency because of low production. Low production including agriculture production means that level of imports is high. If the market through the citizens, avoids the bureaus, they will further rely on the black market to access the much needed forex.

Even sellers will start to insist buyers pay in USD as it becomes harder to access forex. The possibility of not having readily accessible foreign currency will further push prices up. If bureau houses have low volume of transactions their bank deposits will also decrease. If banking deposits decrease the liquidity crisis will deepen.

Just when I thought it couldn’t get worse today I watched a clip of you shouting the zanu pf slogans you were even wearing that horrible scarf. I can’t honestly say I was surprised i always knew that you loved Zanu Pf more than me. That’s why you neither care nor see how much their policies and actions are hurting me.

I long that I am rescued from this before you eventually permanently cripple or kill me. I hate that the children that rely on us have no access to jobs or healthcare because of what you are doing to us. You keep saying austerity first but you can’t cut spending when people are already living below the breadline . What is needed is a RELOAD of the country’s production an opportunity to increase investment https://www.mdc.co.zw/index.php/the-issues/reload.

I long for the day when they are genuine political reforms and investors will come back to us again. I hate that because of you I underperform when i am capable of so much more.

Chenayi Mutambasere (Msc Development Economics and Policy) is the MDC UK and Ireland Province Secretary for Industry and Commerce. You can follow her on Twitter: @ChenayiM