Zanu PF must face it; the balance sheet reflects failure in absolute termsRecent developments that have seen service stations running dry and poor Zimbabweans failing to make it to their workplaces this morning are an indictment on President Robert Mugabe’s leadership, Finance minister Patrick Chinamasa’s “Chinamonics” and the hypocrisy of Reserve Bank of Zimbabwe governor, John Mangudya.

We have seen citizens losing their nerve, with most resorting to stocking basics like cooking oil; this is driven by the fear of a looming calamity.

The People’s Democratic Party (PDP) is irked by Zanu PF’s shocking shift of blame to the citizen, blaming them for “panic buying when everything is normal”.

Zanu PF has decided to heap the entire blame arsenal on social media activity, ignoring the facts on the ground.

They even arrested clergyman, #ThisFlag movement leader, Evan Mawarire and charged him with an attempt to subvert a constitutionally-elected government.

Shelf prices have risen for the past six months and diesel has since become scarce, with a fuel black market beginning to emerge.

Zanu PF, as a whole, has proved beyond reasonable doubt that they cannot run an economy.

They plunged the economy into a crisis multiple times, they adopted the Economic Structural Adjustment Programme (Esap) and tens of thousands lost their jobs.

On black Monday, the Zimbabwe dollar lost 71,5% of its value after the government splashed millions of dollars in unbudgeted money and they invaded farms when land redistribution could have worked better in a systemic plan.

The money printing press was also an ingredient in the recipe for disaster, spiced with quasi-fiscal activities.

It took committed patriots to reverse the mess during the Government of National Unity (GNU); the PDP will, of course, mention part of the leadership, including the ability of its president, Tendai Biti, at the Finance ministry.

Less than half a decade later, Mugabe and his incompetent friends have returned the citizen into the doldrums.

Through his indecisive steward, and that of Chinamasa, the economy is back in a bottomless abyss.

The economy is both in a recession, at the same time in an inflationary situation.

In a normal environment, a crisis of under-accumulation will not go hand-in-hand with price hikes, but the inflation in Zimbabwe is a result of the spiking cost of doing business and distortions in the market resulting from the misguided introduction of the bond notes.

We argued then, as we do now, that the introduction of the bond notes was a catastrophic attempt to deal with a dangerous situation.

If PDP was in government, facing a choice between dangerous and catastrophic, the leadership would chose making the right decisions out of danger, instead of taking short cuts with catastrophic ramifications.

The introduction of the bond note was cynical, disrespectful and a contemptuous move that had absolutely no logic, sense or justification on any rational ground whatsoever.

In our intervention on the introduction of the bond notes, we mentioned that a currency, at the end of the day, is a relationship that captures the country’s productive capacity.

It reflects a country’s output and the strength, quantity and quality of its real economy.

We stated that in the narrow sense, a currency is no more a reflection of the interface between a country’s exports and its imports.

A country’s currency is easily a reflection of its current account or trade position.

Countries with strong and positive trade positions, enjoying trade surpluses, will tend to have stable currencies.

In this regard, to the extent that Zimbabwe’s productive capacity is near to zero, it cannot afford as yet to bring back its currency.

Since 2012, gross domestic product growth has been on a downward spiral, with growth in 2015 standing at -1,8 % and -3,8% in 2016.

More importantly, we have always argued that a currency is a measure and indicator of the existence or otherwise of a social contract. A currency reflects, in part, the respect and confidence that the citizen has in the state or government.

Countries with contested legitimacy tend to suffer invariable currency collapses.

An abused citizen simply rejects the authority of the State and the local currency becomes an immediate causality.

This point fell on deaf ears, yet with reality dawning, Mangudya confirmed in Monday’s NewsDay that the situation in Zimbabwe reflected a lack of confidence in the government.

Mangudya said the bond notes would not fail, and if they did, he would resign. It is time he owns up to his pledge. Cooking up stories about economic resurgence is unsustainable.

This level of failure desires a strong political reaction, the simple step Zimbabweans must take is to register to vote and punish the culprits in 2018 although it might prove too far for folks.

Zanu PF must face it; the balance sheet reflects failure in absolute terms

Author: Jacob Mafume

Source: Zimbabwe Daily

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