We must stop victimising ourselves
If by some chance you stash a stack of United States dollars and later have the misfortune of either falling into a coma or being locked up, when you eventually come to or are released — depending on your circumstance — as sure as the sun rises, your stash would have more or less the same value and buying power as before.
THAT, folks, is essentially the power of the greenback.
Yet there is nothing quite spectacular that underpins its value, especially in recent times.
If you have been following developments in the world’s biggest economy, you might have recently learnt that it is not in the best shape.
At the beginning of this month, the US Treasury Department reported that its total national debt had ballooned to an eye-popping US$30 trillion, which is the highest in history.
For Bishop Lazi, what makes this figure jaw-dropping is the fact that it represents 130 percent of the fading giant’s annual economic output, or Gross Domestic Product (GDP), as they call it.
As much as some people might not want to hear or believe it, the US is currently one of the heavily indebted countries in the world. It gets worse!
In January, its annual inflation rate at 7,5 percent rose to the highest since February 1982, as the Federal Reserve continued to run the printing press to generate as much cash as possible to allow the US to spend its way out of the present crisis.
For perspective, countries in this part of the world are faring much better.
For instance, the rate of price increases in Kenya, Egypt, South Africa and Botswana is hovering around 5 percent.
But, notwithstanding these grim economic fundamentals, the US dollar — largely considered the holy grail in our teapot-shaped Republic — is holding its own around the world.
And then there is the Zimbabwe dollar, which usually causes anxiety to the transacting public because of its notoriety to routinely slide in value.
Yet our economy is in the best of shape. We now know from latest official statistics released by the Reserve Bank of Zimbabwe (RBZ) that the country generated its highest-ever income after foreign currency receipts rose to US$9,7 billion, which dwarfs the previous record of US$7,6 billion realised in 2013 — about eight years ago.
Our exports recorded an incredible 67 percent jump from just US$3,7 billion in 2020 to a staggering US$6,2 billion.
Current forecasts suggest a current account surplus position of US$926 million in 2021, a marked improvement from US$678 million a year earlier.
These are really serious numbers. Gold output similarly climbed to 30 tonnes — just five tonnes shy of the all-time high of 35 tonnes in 2008 — from 19 tonnes in 2020.
The stellar performance has spilled into January, where deliveries topped 2,9 tonnes — triple the figure recorded the same period a year ago — despite heavy rains.
Our supermarkets are also overflowing with locally manufactured goods that now account for 80 percent of local retail sales.
And even as the US Federal Reserve continues to crank up its printing press, the RBZ is actually cooling its machines and going the extra mile of mopping up excess liquidity that might feed into rising inflation.
According to official statistics, Zimbabwe’s reserve money (or central bank money), which is just a fancy word to describe currency in circulation and deposits with commercial banks, ended 2021 at $25,9 billion compared to the maximum threshold of $29 billion for the last quarter of 2021.
This is why the Zimbabwe dollar is now hard to come by.
One of the main characteristics of money is that it has to be scarce, implying that one has to work hard to earn it.
Overall, we have quite healthy economic vitals, but our local currency continues to be wobbly relative to the US dollar.
How the local unit could be losing value is, therefore, as unconscionable as it is unreasonable and illogical.
If you hear some Zimbabweans trash-talking their own currency, you might think it is the world’s hopelessly worthless unit of exchange, even as its black market exchange rate — quoted at $240:US$1 — is far better than fellow African countries whose economies are not encumbered by debilitating sanctions from the US and European Union.
The Bishop always tells folks that US$1 buys 2 314 Tanzanian Shilling in East Africa’s second-biggest economy, whose highest cash denomination is 10 000 Shilling.
Lingering hangover
Clearly, it is neither about the exchange nor how high a denomination is, but it has all to do with its purchasing power and stability.
Bishop Lazi is inclined to believe RBZ governor John Mangudya’s view that the continued decline of the Zimbabwe dollar has nothing to do with economic fundamentals, and is a function of behavioural attitudes, particularly of a people who were hauntingly scarred by the hyperinflationary period.
We are paying dearly for the lingering hangover from this troubled epoch.
No one can quite convincingly explain why prices of things such as vegetables, dried kapenta, pumpkin leaves, mopane worms and roasted maize, among others, are rising in US dollar terms. Kikikikiki.
It is simply madness.
But, as the Bishop said before, nothing quite spectacular underpins the value of the US dollar.
Its value has largely been notional ever since President Franklin Roosevelt, faced with the Great Depression, decided to cut the US dollar’s ties with gold in 1933 in order to print and pump more cash in their then-ailing economy.
In 1971, President Richard Nixon decided to completely abandon the gold standard, where the value of the currency was linked to gold reserves.
So the US dollar actually gets its strength from the blood of compatriots in the Middle East, who continue to suffer for their oil to create the petrodollar, and the long-suffering Africans, who are being robbed blind of their mineral resources.
Harvard University scholar Garikai Chengu could not have made this point clearer in an opinion-editorial he wrote in 2015.
“The petrodollar system spread beyond oil and the US dollar slowly, but surely became the reserve currency for global trade in most commodities and goods. This system allows America to maintain its position of dominance as the world’s only superpower, despite being US$18 trillion in debt,” he said.
Adding: “Threats by any nation to undermine the petrodollar system are viewed by Washington as tantamount to a declaration of war against the US.
“Within the last decade Iraq, Iran and Libya have all threatened to sell their oil in other currencies. Consequently, they have all been subject to crippling US sanctions.”
Bulldozing ahead
Whether the Zimbabwe dollar loses value or not, it does not change the fact that it has helped the economy generate more exports and revive industry, whose growth trajectory is now quite evident and apparent.
The benefits far outweigh the perceived drawbacks.
Now more than ever, we are hopeful that we would be able to lift our people out of poverty and create the prosperous society that we yearn for.
The scripture in Romans 12:12 reminds us: “Be joyful in hope, patient in affliction, faithful in prayer.”
The trials and tribulations we have faced thus far have made us steadfast.
James 1:2-4 says: “Count it all joy, my brothers, when you meet trials of various kinds, for you know that the testing of your faith produces steadfastness. And let steadfastness have its full effect, that you may be perfect and complete, lacking in nothing.”
Stars are gradually lining up for us. The resources from our growing economy are gradually working for our people through improving their human condition.
The previous heartache and headache that came with the inconvenience of trying to acquire simple civic documents such as passports and IDs will slowly become a thing of the past.
Number plates for vehicles are now readily available. Slowly, our roads are being fixed, and the pace is likely to pick up after the rains. Investors are finding their way back. That an international company can shell out US$422 million to buy a lithium mine in Zimbabwe is quite telling.
A lot more is happening in Mvuma, where the investment in a new game-changing steel plant is taking shape, and the good news will be revealed soon enough.
Similarly, American and British investors are scrambling for a piece of the pie in the Muzarabani oil and gas project.
All these developments, and many more that are a sign of things to come, cannot be wished away.
We should unlearn the debilitating attitude of looking down and victimising ourselves. The future looks promising and exciting! Bishop out!