How the Zimbabwe government stole from its people


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There is a scene in the 1978 classic movie, The Great Train Robbery, which portrays the destructive arrogance of Zimbabwe’s monetary policy over the past two decades.

After masterminding a gold heist, Edward Pierce, played by Sean Connery, is dragged before a stern judge.

“Now, on the matter of motive, we ask you: Why did you conceive, plan and execute this dastardly and scandalous crime?” the judge asks.

With zero guilt, to laughter in the gallery, Pierce responds: “I wanted the money.”

In Zimbabwe, once again, Zimbabweans have been robbed, punished for no other reason than the fact that government simply wanted the money, just so it could spend it loosely.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya yesterday directed banks to open Foreign Currency Accounts, which would be separate from the standard local deposit RTGS accounts.

Cutting through all the jargon, what this means is that your bank balance is no longer in US dollars. Not that Zimbabweans did not already know this – their bank balances have been eroded for months – but confirmation of the fact by RBZ has left many with that empty, violated feeling one gets after being pick pocketed.

The bank accounts into which some once deposited real US dollars, are now denominated in a currency that is not really US dollars. Just two years ago, when Mangudya introduced bond notes, he fed a sceptical public the line that the bond note was at par with the US dollar, on the basis of a claimed Afreximbank guarantee whose details were never made public.

Now, in effect, RBZ has somehow managed the incredible feat of turning US dollars into a nameless currency, whose value nobody knows. Central bank calls it “ring-fencing”, but there’s only one word for it – a heist.

For the second time in a decade, Zimbabweans’ savings have been destroyed.

This time, the method of theft has been government borrowing. Domestic debt rose from US$275.8 million in 2012 to current levels of US$9.5 billion. This is what has destroyed the value of people’s money.

Yet, nobody in government can point to anything of real use that this pile of money has been used on, beyond the black hole that is recurrent expenditure. Why did you borrow, one would ask the government? Why did you conceive, plan and execute this dastardly and scandalous crime? “I just wanted the money,” the government would respond.

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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