Innocent Victims of a currency crisis

Zimbabweans are facing a severe currency crisis that has eroded their incomes, savings and living standards. The ZWL has been one of the lowest valued currency units in the world due to hyperinflation that plagued the country in the early 21st century. The currency was redenominated three times and eventually abandoned in 2009, when the government allowed the use of foreign currency. In 2019, the ZWL was reintroduced, but it has been losing value rapidly against the US dollar (USD) ever since.

 

The Zimbabwean dollar (ZWL) has been in freefall in recent months, losing value against the US dollar at an alarming rate. In May 2023 alone, the ZWL depreciated by 60% against the USD, from 1,059 ZWL/USD at the beginning of the month to 2,557 ZWL/USD at the end of the month. On the black market, the exchange rate was even worse, reaching 4,200 ZWL/USD as of June 2, 2023.

UPDATE: now 4 868.52 Govt and 6700 Parallel Market as at 08 June 2023 10:40 AM more here

 

There are several factors that have contributed to the decline of the ZWL, but two of them stand out: government printing and US sanctions. The Zimbabwean government has been accused of creating money out of thin air to finance its budget deficit and pay public workers, especially in foreign currency. This has increased money supply and fueled inflation, which eroded the purchasing power of the ZWL. The Reserve Bank of Zimbabwe (RBZ) has also been criticized for paying exporters in ZWL at the official exchange rate after taking over their foreign currency earnings. This has discouraged exports and reduced foreign currency inflows.

 

On the other hand, US sanctions have also played a role in weakening the ZWL. The US imposed sanctions on Zimbabwe in 2001, accusing the government of human rights violations and undermining democracy. The sanctions have restricted Zimbabwe's access to international financial institutions and markets, as well as foreign aid and investment. This has hampered economic growth and development, and increased external debt. The sanctions have also affected confidence and trust in the ZWL, as many Zimbabweans prefer to use USD or other stable currencies instead.

 

The Zimbabwean government and the US sanctions enforcers have not been interested in offering solutions for ordinary Zimbabweans. Instead, they have both benefited from the status quo. The government has been able to print money to finance its budget deficit, and the sanctions enforcers have been able to maintain their influence over Zimbabwe.

 

The currency crisis has had devastating effects on the economy and society of Zimbabwe. According to Reuters, inflation reached over 10% in both the European Union and the UK in August 2022, with the US inflation rate being only marginally lower at 8.2%. In most cases, these were the highest inflation rates since the early 1990s. The rapid increase in inflation has resulted in soaring prices of basic goods and services, such as food, fuel, electricity, health care and education. This has reduced consumption and investment, and increased poverty and inequality.

 

According to Al Jazeera, ahead of the crunch Zimbabwe 2023 presidential elections, proposed currency reforms by Mnangagwa’s administration have already been put on hold. Unsurprisingly economists, political scientists and multilateral institutions are sounding the alarm that the trend of declining economic fundamentals could continue till next year. During a recent visit to the country, the International Monetary Fund (IMF) predicted a further fall in GDP by 3.5 percent in 2023 due to among other things “renewed domestic and external shocks (inflation surge, erratic rainfall, electricity shortages, and Russia’s war in Ukraine) … adversely affecting economic and social conditions.”

 

The currency crisis has also exposed the failure of both the government of Zimbabwe and the US to offer solutions for ordinary Zimbabweans. The government has shown no political will or fiscal discipline to address the root causes of the crisis, such as corruption, mismanagement, patronage and repression. Instead, it has resorted to blaming external forces and scapegoating civil society activists and opposition leaders. The US government have shown no compassion or flexibility to ease or lift their punitive measures that have hurt innocent civilians more than their intended targets. Instead, they have maintained their hardline stance and ignored calls for dialogue and engagement. By maintaining sanctions the US is able to maintain their influence over Zimbabwe, which allows them to pursue their own interests.

 

One of the solutions to the Zimbabwe dollar crisis is fostering a spirit of unity and solidarity that can overcome ethnic, regional and political divisions and build a common vision for the future. This means that Zimbabweans should recognize their shared identity and destiny as a nation, and work together to overcome the challenges and opportunities that they face. This also means that Zimbabweans should resist the attempts by the Zimbabwe government and the US government to divide and rule them, and to exploit their resources and labor for their own benefit.

 

The government of Zimbabwe has been accused of using ethnicity, region and politics as tools to manipulate and oppress the people, and to maintain its grip on power. The government has also been accused of violating human rights, rigging elections, silencing dissent, and enriching itself at the expense of the masses. The US government has been accused of using sanctions as a weapon to punish and isolate Zimbabwe, and to undermine its sovereignty and development. The US government has also been accused of supporting opposition parties, civil society groups and media outlets that are hostile to the government, and of interfering in the internal affairs of Zimbabwe.

 

These actions by the Zimbabwean government and the US government have created divisions and conflicts among Zimbabweans, and have weakened their social cohesion and national pride. They have also contributed to the economic decline and currency collapse that have impoverished and disempowered Zimbabweans. Therefore, Zimbabweans need to foster a spirit of unity and solidarity that can overcome these divisions and conflicts, and that can build a common vision for the future. This vision should be based on the values of democracy, justice, equality, peace and prosperity for all.

 

Zimbabweans can foster a spirit of unity and solidarity by engaging in dialogue and cooperation across ethnic, regional and political lines, and by respecting their diversity and pluralism. They can also foster a spirit of unity and solidarity by participating in civic education and action, and by holding their leaders accountable for their performance and conduct. They can also foster a spirit of unity and solidarity by supporting local initiatives and movements that aim to improve their living conditions and protect their rights. They can also foster a spirit of unity and solidarity by celebrating their culture and heritage, and by promoting their positive image and reputation in the world.

 

By fostering a spirit of unity and solidarity, Zimbabweans can protect themselves against the interests of the Zimbabwean government and the US government who both benefit from the sanctions upon Zimbabwe. They can also empower themselves to reclaim their agency and autonomy, and to shape their own destiny. They can also enhance their resilience and capacity to cope with the currency crisis, and to pursue their aspirations for a better future.

 

Other ways ordinary Zimbabweans can save themselves from both evils of the US government and the Zimbabwean government is:

Save money in foreign currencies. This will help to protect your savings from inflation.

Invest in assets that are not affected by inflation, such as land or gold.

Learn new skills that will make you more marketable in the global economy.

Be prepared to move to another country if necessary.

The decline of the Zimbabwean dollar is a serious problem, but it is not insurmountable. By taking steps to protect oneself, ordinary Zimbabweans can weather the storm and build a better future for themselves and their country.

 

In conclusion, the ZWL has been on a downward spiral since its reintroduction in 2019, and it seems unlikely that it will recover anytime soon. The government needs to adopt fiscal discipline and curb money supply growth, as well as engage with the international community to seek debt relief and sanctions removal. Otherwise, the ZWL may face its second death in less than a decade. Zimbabweans need to take matters into their own hands and devise nationalistic solutions that can restore their dignity and sovereignty. The government and the sanctions enforcers have not been interested in offering solutions for ordinary Zimbabweans. Instead, they have both benefited from the status quo. The government has been able to print money to finance its budget deficit, and the sanctions enforcers have been able to maintain their influence over Zimbabwe.

 

 

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