I have been listening to the Zimbabwe economic discourse for some time. The entire conversation is nearly always about what others can do for us.
If the Chinese give us mega deals then we will be okay. If the British put us in the Commonwealth then our economy will grow. If the Americans do this. If the Japanese do that.
The solution to Zimbabwe's problems lies with us. When the Munhumutapa empire was among the richest on earth there was no commonwealth. There were no Chinese. Native Americans did not know there is a continent called Africa. Europeans were diseased beggars fleeing from the Black Death and poverty.
So why is it that now Europe, America and China are needed for us to become prosperous? Will they bring anything here?
What is it that is making us poor now? I say it is our mentally colonised minds.
For example why do people the world over want gold and diamonds? It is because those materials are inert. They do not rot or rust. They last forever and they maintain their value forever.
But here in Zimbabwe what do we do? If we dig up gold and diamonds in excess of what we need, we give them away. Then we go and buy huge quantities of things that rust, rot, or, we just end up excreting in the toilet after a few hours. Cars, fancy clothes, expensive beer and food.
If a typical Zimbabwean finds gold or diamonds worth ten million dollars, they will go and sell all of it, and buy ten supercars. A car is mostly iron and plastic so you can be sure it will rust and degrade and have almost no value in about ten years time.
The people we are selling the gold and diamonds to, what are they doing? Most are locking it up in safes. They know even after 20 years those substances will have much higher, or at least, the same value. In those twenty years, gold and diamonds do not need a service, they do not need mechanics, they do not need replacement parts and they do not consume fuel to be useful. They do not depreciate. It is called investment.
Yes a car is useful for transportation but for that you only need one or two good cars, not ten very expensive ones.
In Zimbabwe we take investable materials and exchange them with consumables. Consumables get consumed. If you buy food worth $100 in one sitting (because it is a 'high class' restaurant) once it served on the plate in front of you that is it. It has lost its value. Even if you do not want to eat it you cannot sell it to the next customer, but your $100 is gone for good.
We also have another very serious problem. The belief that government has the right to take money from people and use it for what it deems 'higher' priorities.
I am not going to take the risk of driving on Chiweta mountain at night, trying to earn foreign currency, just to hand the money over to someone else through the government. I am not doing it so that the government can take what Tanzanians have paid me, and hand it over to a minister who is sleeping in his Chisipite house while I risk being murdered by robbers on remote stretches of road.
That practice of taking people's money and handing it over to others, is what has killed Zimbabwe's economy. It removes the incentive for people to go out and earn more. Rather than go and negotiate the risky Kapiringozi at night, I would rather stay in the safety of my house.
If I am a foreigner with a lot of money, I am not going to let it sit in a Zimbabwean account. I will only bringing in what is absolutely necessary. Why take the risk that the Zimbabwe government will take my foreign currency, and give me something that I can't use.
As long as the practice of foreign currency 'allocations' continues, whether by committee, whether by command allocation, the Zimbabwe economy will not recover. The bottom line is people will not have confidence and trust in the Zimbabwean monetary system. It will be seen as a high risk area and it is natural for people to avoid risks.
So my advise to Mthuli Ncube is disband your committee. Let the banks deal with their customers without government interference. Money is a substitute for property and should be treated like any other property.
Mthuli, I cannot come and take your suit and allocate to my father, because I deem my sister's marriage ceremony to be more important than your business meeting. Chances are if I do it again and again you won't bother buy suits anymore.
But that is exactly what our government is doing with foreign currency. They will take a miner's foreign currency and allocate it to a minister because they deem the ministers trip to China to be more important than the miner importing spare parts for their bulldozers and other machinery.
That practice also has knock on effects. Where the miner were planning to mine a hundred tonnes of ore, now they can only mine maybe forty because they have to spend a too much time just sitting and waiting for an allocation.
Yes. The foreign currency allocation practice is actually reducing Zimbabwe's capacity to earn more foreign currency. It is a serious bottleneck for producers.
It creates a vicious cycle. We allocate scarce foreign currency to non-producers. We earn less because of that. We introduce more stringent allocation rules because there is less to go round, and we end up earning lesser foreign currency, worsening the problem.
Therefore end the allocation sytem. If ministers or the president cannot find forex for trips ngavagare kumba vadye sadza. Let them stay at home, there is plenty sadza they won't starve to death. Money should never ever be taken from producers for that purpose.
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