Hyperinflation, shortages loom for Zim… again
The country remains gripped by political stagnation hinging on the age-defying nonagenarian in office
IF YOUR president is telling off Donald Trump for his threat to “totally destroy” North Korea, only to accuse some of his own comrades of sowing the seeds of panic among Zimbabweans in an attempt to incite riots against his government, it is time for public servants to take extreme measures.
Zanu-PF veteran and Finance and Economic Development Minister Patrick Chinamasa finds himself in this spot. Some observers (and certain Zimbabweans) are reportedly bracing themselves for hyperinflation and shortages of basics, again. Chinamasa is not the only public servant in desperate straits to balance his books.
Admore Kandlela, the chief executive of the government-owned Post Office Savings Bank (POSB), is with him. One needs nothing short of heroics to run a government entity of any kind in Zimbabwe – that perpetual underachiever of the Southern African Development Community (SADC), which ought to be a supernova.
Afro-optimists like me ramble on about how much potential Zimbabwe has and how we all should stay close to it because the tide is about to turn. Where is King Canute when you need him to make this sadistic tide to get a move on?
Zimbabwe remains a classic African case of “coulda-shoulda” been a prosperous country. For all its natural resources, Africa’s high literacy rate and superb work ethic, the country remains gripped by political stagnation hinging on the age-defying nonagenarian in office. Investors tread carefully, hoping for improvement, until something startles them and retracts them back into their precautionary shell.
At this point, Chinamasa is selling the gospel of a $1billion bailout by trade finance bank, the African Export and Import Bank. Kandlela, on the other hand, is harking back to the good old days as he readies his POSB to accept goats and other livestock as collateral.
This amid a muted public confidence in the financial system. When hyperinflation hit 1.8 million percent in 2008, many Zimbabweans watched their retirement savings vaporising daily until they were as good as destitute.
Money was being ferried in wheelbarrows to conduct transactions, until the country started accepting the US dollar and the rand as legal tender. In the meantime, cement companies were paying their workers with bags of cement because the Zimbabwean dollar had a lower boiling point than benzene.
Are we headed back there? Nobody knows, but many Zimbabweans are reportedly not taking any chances. Still, the real heroes and villains are people like Chinamasa and Kandlela. What else can they do, other than do whatever it takes to keep their organisations afloat? Conversely, there are those who will chastise them for buttressing a political economic sham by staying in office.
It is easy to criticise from a distance. But, when your country is in arrears by close to $1.8bn – with the creditor being the World Bank the president told off – you have to rob Peter to pay Paul, as the saying goes. If your job is to build a Post Office Savings Bank in a country where people are 50-50 about the banking system, you have no choice but to start accepting goats as security for loans. No bank can grow sustainably in the economic climate without lending. Lending calls for collateral. But if the value of property is not stable, one ought to get creative.
There are no points for tidiness when putting out fires on the economic front. Fortunately, Zimbabwe is back to exporting maize after a bumper harvest in June. There were reports of most farmers reaping up to 11 tons per hectare, above the government benchmark of five tons. This can mean only that Zimbabweans will not be short of goats; while Chinamasa puts on a brave face and accepts yet another bailout.
This is in a country that should be self-sufficient; as should many other African countries. Only when we all wake up to it.
Victor Kgomoeswana is the author of Africa is Open for Business, a media commentator and public speaker on African business affairs, and a weekly columnist for Sunday Independent. Twitter handle: @VictorAfrica