By Professor Sheunesu Mpepereki
IN the last series of articles before we were hit by COVID-19 and went into lockdown, I was exploring the theme on heritage teaching and learning.
But over the last few weeks, the steep decline of the local Zimbabwean currency against the US dollar on the so-called black market has alerted me to an alarming development where some Zimbabweans who have been calling for urgent re-dollarisation feel the cows have come home with the COVID-19 induced relaxation of foreign currency usage.
I am not an economist, but we all have been there.
I have noticed a certain degree of excitement among formal and informal traders about the COVID-19-induced re-dollarisation.
Suddenly, all prices are being quoted in US dollars and one can sense an air of expectation for better times to roll in on the back of the officially sanctioned use of US dollars for all transactions.
While the move was welcome to facilitate purchase of essential goods and services during the lockdown period by those with access to such funds, where do we go after lockdown?
How much foreign exchange do Zimbabweans hold under pillows and inside socks and underwear?
Is it enough to re-dollarise and liquefy the economy?
I grew up in a typical African reserve.
These places still exist but under different economic circumstances now where the cash economy is more pronounced.
Along the road, one comes across women and children selling tomatoes, pumpkins and sweet potatoes.
How much per bucket I ask?
Ten dollars only, the little girl replies!
I am wondering which dollar is being referred to here: the local or the US dollar.
“Dhora ripi racho,” I ask.
“Ah ma ‘USA’ ka, hanzi akadzoka.”
My quick calculation says the bucket costs ZWL$300, still a lot of money by local standards.
Of course prices have gone up but I am wondering how many people will pass by who will have US$10 to spend on the sweet potatoes!
Still, the expectation is high among these desperate people that maybe finally they will also break into the lucrative US dollar economy through the dollarisation!
Everywhere I go, prices of all kinds of items are being quoted in US dollars.
I do not have any US dollars.
“Hah, mudhara, mungashaya maUSA imi?”
How can someone like you not have US dollars! The young vendor asks.
Where do I get them, I ask back?
“Ah ko vamwe vatinoona vanoawana kupi?”
Where do all the others get the US dollars from?
And that, indeed, is a good question!
Indeed where do people get US dollars from.
Good question.
About 10-20 percent of the population are connected to sources of US dollars.
Illegal forex dealers, smugglers, those receiving money from relatives in the Diaspora and the rest who are into it by hook or by crook!
Machete gangs and other ‘organised’ armed robbers, all want to celebrate re-dollarisation.
Anti-money laundering laws?
Well, are those relevant to Zimbabwe?
Of course!
But do you not get the impression that if you put those laws to a referendum, they would be rejected outright!
Do you not get the sense that all the people calling for re-dollarisation are against all the anti-money laundering regulations that Government and the Anti-corruption Commission are putting in place?
Certainly the rural population, who remain marginalised in the dollarised economy, have no capacity to damage the economy through externalisation.
If they had access to US dollars or any other foreign currency they likely would put it to good use: farming inputs, school fees, purchase of implements and livestock or, for some, financing matrimonial obligations like ‘roora’.
And if the authorities insisted that all such US dollars be converted to ‘local’ money before it can be used to exchange value (goods and services), law-abiding citizens would dutifully visit the authorised dealers such as banks and bureau de changes to convert their US dollars to a currency they can use to buy their needs.
Perhaps the money-laundering lot must exclude the genuine importers of raw materials for the manufacturing industries.
But even among the exporters, many have been caught up in nefarious foreign currency externalisation deals through under-invoicing exports and failing to repatriate export proceeds.
Gradually, most businesses run by dollar-hungry executives and shareholders have deteriorated and folded up on the back of externalised forex earnings which become unavailable for recapitalisation!
The simple lesson is that viable businesses are not built on criminal activities.
The economy of Zimbabwe cannot be sustained through criminal and illegal monetary transactions facilitated by the use of an internationally accepted currency, the US dollar, that is not kept in formal banks but in pillows and secret vaults at private residences.
Sadly, all these secretly stashed funds are officially referred to as ‘free funds’.
While some of the so-called ‘free funds’ are acquired through legitimate legal business transactions, the bulk are products of criminal, underhand and even public extortion.