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Gono goes for the usual nonsense
Elton Mangoma
July 31, 2008

Reserve Bank Governor Gideon Gono lopped off 10 zeroes from the country's bearer cheques yesterday in a desperate attempt to cure the symptoms rather than the root cause of the economic crisis.

This will definitely not work, given that the last time the zeroes were removed, they came back with a vengeance barely three months after the monetary policy measures were taken.

In any case, it would have been easier to remove either three zeroes, six zeroes, nine zeroes or 12 zeroes to make the mathematics of the changeover easier and better for the public.

The latest measures, once again, will fall flat and will cause serious confusion among the public. The announcement that old coins are coming back into circulation will benefit people who do not have a banking culture, which will send a wrong signal to the market at a time when confidence building should be top priority to the central bank.

We believe that any central bank should know the amount of money that is in circulation and clearly, allowing people to scrounge for old money from their drawers will make it impossible to know how much currency is on the market. It could further push up inflation, which has now hit stratospheric levels of over 10 million percent.

Moreover, the token increase of withdrawal limits from $100 billion (now $10) to $2 trillion (or $200) will not bring any relief to the public at time when that amount can hardly buy you two bars of soap.

The performance of our mining and agricultural sectors has significantly declined. The monetary statement also paints a gloomy picture of Zimbabwe's export performance. Exporters were retaining 65 percent of their proceeds and selling 35 percent to the RBZ. The increase in the RBZ share to 45 percent as announced yesterday will make it harder for industry to operate at a time when our expert performance needs to be boosted for the good of our economy.

The MDC believes that no amount of tinkering with currency denominations will address the Zimbabwean crisis. As long as there is no production, we will continue to move in circles as a country. The supply side of the economy should be addressed by confronting Zimbabweans real crisis, which is the crisis of governance and legitimacy.

The dialogue currently taking place between the country's political players is the best way forward as long as there is sincerity from all the players. Ordinary Zimbabweans have been brutalised, their houses have been burnt. Others have been killed. They want to start afresh. They want food, jobs, better education and health care. They want the outcome of the dialogue process to bring back their dignity, which has been lost because of many years of corruption and patronage.

We must not fail the nation.

* Hon. Elton Mangoma (Mr) is MP-Elect, Makoni North Constituency and MDC Secretary for Economic Affairs

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