Hyper­in­fla­tion, short­ages loom for Zim… again

The coun­try re­mains gripped by po­lit­i­cal stag­na­tion hing­ing on the age-de­fy­ing nona­ge­nar­ian in of­fice

African Independent - - OUTLOOK -

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

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