Home Letter From Zimbabwe Major climbdown

Major climbdown

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Major climbdown
ABSURD: Protex bath soap now costs P43.90

With the cost of most commodities either shooting up daily or simply not available on the shelves, something really had to give.

Having banned the importation of a number of things to protect the local industry, the government was this week left with no choice but to rethink that decision as shelves were running empty.

For commodities that were available, they were way beyond the reach of many.

In any case, there really is no industry to talk about as the manufacturing sector is as good as dead.

I went into a few supermarkets this week, including the leading stores, Pick n Pay and Choppies, to gain a fresh appreciation of new prices and to buy a few things so I can get Mazoe Orange juice (gosh I miss the days when my biggest worry was the taste of Mazoe!). I must say the prices really were ridiculous.

Of course the retailers can justify their high prices – and understandably so because they buy their stock mainly from South Africa despite selling in what is now referred to as bollars (combination of bond notes and the US dollar) in street lingo.

The root cause of all the madness is that Zimbabwe has no sound economy let alone a currency to talk about.

But before I digress too far, let me explain what I meant by saying I needed to buy a few things so can I get Mazoe.

What is happening now in most shops is that you need to buy groceries worth more than $15 (P150) to be able to buy Mazoe or cooking oil which cost an average of $3 (P30) and $5 (P50) respectively.

These two commodities are not available on the shelves but rather are with the till operator, ready to give those in need but only after they purchase the minimum required $15 worth of items.

While it may seem outrageous that one has to buy other goods to get these commodities, I personally think it’s not a bad idea, especially in the current situation because many Zimbos seem to have developed a hoarding syndrome, which results in unnecessary shortages.

Major climbdown
BEYOND THE REACH OF MANY: Beef P48.90

If we could just buy what we need I am sure some of the goods would not be in such serious short supply.

Anyway, the good news, at least for those with access to forex, is that the government on Tuesday made a major climb down and lifted the ban on importation of most commodities including cooking oil, cement, stockfeed, agrochemicals, juice blends, sugar, soap, salad creams among other things.

Allowing individuals and companies to import these goods and more, will ensure better availability and thus bring down prices as there will be less demand.

What this also effectively means is that the bond will eventually die a natural death. Who will want to sell in a currency that has no value beyond borders?

This also means that the government will surely have to come to its senses and officially scrap off the bond so people can be paid in real money – after all, it’s what makes the world go round and Zimbabwe is no different.

9 COMMENTS

  1. The bond cannot be just scrapped off it is over printing of money who had access to the RBZ who allowed this to happen how long has it been happening. Who has been having access to the $ if one brings in dollars they are automatically changed to Bondnotes who is taking the US$ it could be the elite

  2. If an investor is bringing US$ it should stay in US$ and not changed into useless bond notes when an account is opened. this is daylight robbery

    Visas are charged in US$ not useless bondnotes why?
    The country has been virtually bankrupt for a long while and corruption spiralled out of control

    This piece is taken from an international newspaper in 2013
    “Zimbabwe’s banker: Gideon Gono
    If central bankers are hired to beat inflation and safeguard the national currency, then Gideon Gono, 53, has a perverse distinction.
    Robert Mugabe’s banker, the Zimbabwe oil deal and payments to children called Pride, Praise and Passion
    Mr Gono admitted that the payments had been made to his twin daughters and a son, but denied ever taking a ‘bribe’
    On his watch at the Reserve Bank, Zimbabwe suffered inflation in the billions of per cent – and its currency was simply killed off.”

    When Mr Gono found it impossible to churn out ever higher denominations of banknotes – a can of Diet Coke cost 56 million Zimbabwe dollars in 2008 – he was forced to allow the US dollar as legal tender from April 2009.

    Instantly, the Zimbabwe dollar passed into history, making Mr Gono a member of the Weimar club of central bankers, namely those who have overseen the destruction of their national currencies. This was a humiliating nadir for a man who rose from teaboy to become a key figure in Robert Mugabe’s Zimbabwe. Born in 1959, Mr Gono’s first job was messenger and tea-maker at a brewery. Ferociously ambitious and hard-working, he took three A-levels and a diploma in bookkeeping in his spare time, winning promotion to accounts clerk.

    In 1987, he ventured into banking, eventually becoming chief executive of the Commercial Bank of Zimbabwe (CBZ) in 1995. Five months later, he met Mr Mugabe for the first time, writing that the president “immediately took a liking to my story of self-improvement”.

    Mr Mugabe took enough of a shine to Mr Gono to make the latter his personal banker. In 2003, Mr Mugabe chose Mr Gono to be governor of the Reserve Bank. Articulate and plausible, he appeared a breath of fresh air. Mr Gono met Western ambassadors and admitted that mistakes had been made. Zimbabwe had to restore relations with the West in order to rebuild its economy.

    While he talked a good game, Mr Gono’s priority was to keep Mr Mugabe happy. That meant printing money at a furious pace in order to fund a bankrupt government. The result was hyperinflation and accelerating economic collapse.

    Mr Gono blamed this on “Western sanctions”. But the benefit of being on the front line of economic catastrophe was that he became immensely powerful. To keep the regime afloat, Mr Gono was the key deal-maker, engaged in a permanent scramble for fuel supplies and other essentials.

    Mr Mugabe kept his banker in the job, even after the opposition joined the government in 2009. He remained firmly loyal to a man labelled by one Western envoy as “Gideon Gono, the destroyer of Zimbabwe’s economy”.

  3. The words “Corruption and incompetence, nepotism just to name a few ” seems to be taboo on the continent no one at the very top is prepared to talk about it openly. they just let ride by turning a blind eye to it for unknown reasons to themselves = unprofessional

  4. This is a piece of article relating to South African Airways relating where business is not done properly
    “South Africa’s state-owned airline should be shut down, the country’s new finance minister has said.

    “It’s loss-making, we are unlikely to sort out the situation, so my view would be close it down,” Tito Mboweni told an investor conference in the US.

    One of Africa’s biggest airlines, South Africa Airways (SAA) has lost money every year since 2011, and survives with government support.

    SAA is among the struggling state firms that the president promised to revive.”

    It should not be SHUTDOWN someone somewhere is not using their grey matter – it seems on the continent the state are in a hurry to grab some companies but they do not flourish they go down hill – WHY??

  5. in another article

    “Police and Central Intelligence Organisation operatives on Monday reportedly summoned Sakunda Holdings owner Kuda Tagwirei, a reported close ally of the establishment, for questioning over his alleged dealings in foreign currency on the black market.

    By Everson Mushava

    NewsDay is reliably informed that the police and intelligence officers wanted to raid the command agriculture benefactor’s home on Sunday, but failed after he left Harare for Wedza aboard a military helicopter with Vice-President Constantino Chiwenga.

    Although police spokesperson Paul Nyathi denied knowledge of the development, well-placed sources insisted that Tagwirei was later summoned for questioning on Monday morning.

    “I don’t know anything about that,” Nyathi said.

    But a source maintained: “He was invited for questioning on Monday morning. He initially resisted, but later complied.”

    On Sunday, former Zanu PF youth league member William “Acie Lumumba” Mutumanje claimed the country had been captured by a cartel of business people now corruptly controlling the fuel industry and fuelling the mess on the black market.

    The outspoken Mutumanje claimed the country’s economy was now in the hands of a businessman, whom he called “Queen Bee”, who controls the fuel industry and some Reserve Bank of Zimbabwe officials.”

    The question how long has this cartel being operating in this manner -possibly for 37+ years who are they linked to??

  6. There is a possibility that this type of cartels are operating in many african countries and nothing is being done about them – remember the Gupta scenario in South Africa – Nothing has come out of it and why is it taking long – it should not take long – the Guptas should extradited if they are living in another country to prove themselves if they claim they are innocent

  7. This is another topic that those at the very top and at SADC or Au Organisational level in continent refuse to talk about – human rights besides Corruption they go hand in hand
    “Former President Robert Mugabe and his wife Grace have been fingered in a Zimbabwe Human Rights Commission’s (ZHRC) report as human rights violators.

    by VENERANDA LANGA

    The 2017 ZHRC report, which was tabled before the National Assembly on Thursday, also pointed out that Zimbabweans were suffering due to corruption, political patronage and impunity.

    ZHRC chairperson Elasto Mugwadi said in the report 2017 witnessed gross violations of human rights that included the right to life, food and water, education, health, shelter and human dignity.

    He said the countrywide Zanu PF youth interface rallies undertaken by Mugabe and Grace when they were still in power were used as a platform to attack and denigrate their perceived political opponents.

    “(They) grossly undermined Zimbabwe’s founding constitutional values and principles, including the rule of law and recognition of the inherent worth and dignity of each human being,” Mugwadi said.

    “Accountability to citizens in relation to fulfilment of many of their rights was eroded as government ministers, senior civil servants and other duty bearers spent most of their time attending political rallies and negating their constitutional and statutory obligations to deliver services to citizenry.”

    The ZHRC report said corruption reported at public entities and in the private sector highlighted the endemic culture of personal enrichment, political patronage and impunity which crippled service delivery across key sectors of the economy. It said this further compromised the protection and fulfilment of human rights to ordinary Zimbabweans.

    “In 2017, opposition parties appeared to struggle to offer any alternative to help alleviate the deteriorating human rights situation in the country as their calls to authorities to respect human rights went unheeded,” reads the report.

    “Perennial disagreements undermined the opposition parties’ widely publicised endeavours to form a grand coalition to contest the 2018 general elections as a united front against the ruling Zanu PF party.”

    The report also cited widespread and pervasive corruption by the Zimbabwe Republic Police officers, particularly the manner in which they were enforcing and managing roadblocks throughout the country where the public perceived them as perpetuating lawlessness and indiscipline.

    “Human rights violations were committed against street vendors who were assaulted and had some of their wares confiscated by the ZRP and municipal police mainly in Harare during operations to clear the streets of vendors and during demonstrations against police heavy-handedness,” said ZHRC.

    “There were allegations of some of the vendors and other protesters having been tortured in detention following their arrest. Efforts by the commission to engage the police following the completion of the Bulawayo (Burombo Flats) and Epworth reports on brutalities committed during the 2016 demonstrations were met with arrogance.” “

  8. Can guarantee the Mugabes and many others like them will get away with Human Rights Violations on ordinary citizens. They will be accorded red carpet treatment and pampered all the way while they get away with this

  9. The UN Director for Mena warns that the end of the refugee crises is NOT IN SIGHT according to an interveiw with hin on an International television station

    The international media is reporting that crisis in the Central African Republic according to AID agencies it the most NEGLECTED crisis in the world again it is the Media and aid agencies coming to the rescue of those in need while those in top positions are part of the problem and are sitting and watching from the Sidelines Where are those in the AU decision making to try to resolve the crisis in the Central African Repbulic and other places??