There
has been a raging debate on whether Zimbabwe should trash the United States
dollar and adopt the South African rand as a measure to stabilise the ailing
economy. This is a dangerous diagnosis considering the fact that there is no
underlying reason or rationale for such course of action. No matter how much
policy makers or economic commentators spend their energies debating on a currency
to adopt the reality is that they are way offside and ignorant of the real
issues which have stalled economic progress in Zimbabwe. The truth of the
matter is that Zimbabwe’s economic policies are not globally competitive and
robust to ensure the much needed growth and development. This is the problem
with most African states they tend to major on the minor and major on the
minor.
Ditching
the United States dollar will not change the course of Zimbabwe’s economic
direction by an inch but a new thinking in policy formulation and implementation
will definitely result in the realisation of economic gains. Zimbabwe will not
be granted billions of Rands by simply joining the Rand Monetary Union and
neither will the economy flourish by adopting any form of currency and that
means even adopting our own, whether we call it Ibwe, Pound or Dollar. South
Africa will not accept the country into the Rand community due to policy
inconsistencies and an uncertain economic future the country is heading to as
this will also have an adverse effect on other countries in the community.
Money
is always chasing production. This is the reason why China has got the largest
foreign reserves in the world. China’s economy has been able to attract pounds,
euros, dollars, pesos and francs amongst a host of currencies. The level of
economic activity and trade which has come out of China has allowed a steady
flow of capital which has further strengthened its economic growth and development.
Liquidity or money is a function of production and investment, two qualities
which are currently absent in the economic set up Zimbabwe finds itself in
today. To quench the liquidity thirst the Zimbabwean economy is facing there is
need for a radical policy shift which is able to propel the economy to greater
heights and create the much needed employment, growth and development.
With
all due rationale the US dollar has done no harm but much good to Zimbabwe’s
economy and not any form of currency can avert the economic crisis which the
country is sitting on. Only the right economic policy and strategy will deliver
economic prosperity to Zimbabwe. Instead of wasting valuable time on a non-productive
debate about ditching the United States dollar policy makers should be working
overtime on making Zimbabwe an attractive investment destination which can pull
some sustainable and profitable projects. There should be more emphasis on how
to make the over hypnotised ZimAsset work and improved effort and action from
the government.
Even
if we chose to adopt the fanciest currency in the world the status-quo remains
as long as the country is not able to churn out new production which can move
the economy forward. Liquidity is a function of production and investment and
unless we rectify the two factors any form of debate about currencies to adopt
and ditch is mere noise and futile. After all we thought Zimbabwe adopted the multi-currency
system not just the United States dollar.
