How the Zimbabwe government stole from its people


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The robbery has been massive, from the decimation of life savings to the destruction of pensions. Now they must wonder what value they actually have in their accounts, and they even have to pay more in electronic transaction charges to use that money. Once again, Zimbabweans are being punished for government’s failures.

In 2015, the Zimdollar was “demonetised”, or taken out of circulation. To make this possible, all the Zimbabwe dollar deposits that existed at the time Zimbabwe moved to the US dollar in 2009 had to be converted to US dollars. What did depositors get for their life savings? Just US$5 each.

“All genuine or normal bank accounts, other than loan accounts, as at 31 December 2008 would be paid an equal flat amount of US$5 per account,” Mangudya said in 2015.

This, he said then, would “bring to finality this long outstanding government obligation to the banking public and to formally pronounce the demise of the local currency”. Now, but by another name, it has happened again. And, worse still, that “demise of the local currency” does not seem to have ever happened at all.

That conversion robbed Zimbabweans of their pensions. A Commission of Inquiry into the Conversion of Insurance and Pension Values from the Zimbabwe dollar to the United States dollar released a report this year that said pensions virtually disappeared after the 2015 conversion, which was done at an exchange rate of US$1 to ZW$35 quadrillion.

There had been more brazen robberies earlier, whose effects will now be felt as banks set up the new FCAs.

Back in 2003, the RBZ, was under the eccentric Gideon Gono. Under his hyper-inflationary reign, Zimbabweans were robbed of value countless times as he repeatedly introduced one new denomination after the other, lopping zeroes off the currency, sometimes overnight. Then, just as now, it was all down to spending. For Gono, this included “quasi-fiscal activities”, a broad subsidy program that included printing money to buy anything from scotch carts to groceries. Gono’s power rose, but the power of the Zimdollar fell.

Then Gono began robbing citizens’ bank accounts. FCA holders were suddenly told by their banks that they were now required to sell 50 percent of their forex earnings to the government, at a frozen exchange rate.

The raids did not end there. In 2007, under threat of expulsion from the IMF and facing a shortage of critical imports, Gono raided the banks and ran off with about $400 million in foreign currency from FCAs held by private citizens, NGOs and even charities.

Confronted, Gono denied everything: “For anyone to suggest that we either raided exporters’ FCAs or raided any other depositors’ facilities…is scandalous, to say the least”.

Continued next page

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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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