Things Fall Apart At The Reserve Bank of Zimbabwe

    By Againstprof Makuyana

    Just before the RBZ regulations are holistically applied and before the Bond notes are even issued , the RBZ has come to exempt farmers reclassifying them as “corporate clients ” whose maximum withdrawals should be USD $ 10 000.

    It is this back and forth on the part of our Policymakers that continue to wipe off the remaining little public confidence.

    It is these inconsistencies in the application of laws and regulations that fuel corruption. What will now stop a tobacco farmer from conniving with those who want cash to transfer money into his account and then he withdraw for them and charge “facilitation fee ” ????

    Besides what criteria is the RBZ using to categorise someone as a ” Business corporate client ” ?? Is a Vendor or a Cross Border or importer like Nomathemba Primrose Ndebele not a corporate client ???

    I hope this decision is not Politically motivated because we all know that all Cabinet Ministers and senior Zanu pf Officials have farms and they are likely to have pressurised RBZ Governor Mangudya to relax the regulation for them . This will actually not solve the problem but in fact it will create a serious challenge especially after the issuance of the Bond notes .

    Like what my Mukoma Alex Magaisa said we are likely to see the artificial creation of some “Tumbuzenenes” in Zimbabwe were only a few will have access to forex , deliberately create an artificial shortage and they will sale it at higher price !!! Again the Gresham Law will come into effect as the stronger currency Is forced into the underground Black market.

    Since farmers have demonstrated that “if you protest the law will will be relaxed for you ” we are likely to see Cross Borders and Vendors joining in demanding that they also be classified as “Business corporate clients ” since they are into business too .

    We are also likely to see war veterans , with their sense of entitlement , asking the President to also intervene have the law relaxed for them .

    This is not the first time the RBZ has come up with selective application of regulations . Some years ago , during a similar cash crises , the RBZ issued special negotiable instruments called ” Farmers Agro Cheques ” to accommodate the farmers .

    The facility was abused with those who have been categorised as farmers eventually acting as “middlemen ” to get money from the Bank and sell it at charges to the public.

    This time around the abuse will be excessive since we will be having two currencies operating (the Bond note and the usd ) . We are likely to see those with USDs (the Tumbuzenenes ) selling them.

    Nomatter how we try to undermine the opinion of academics , you can’t run an economy like a jungle of monkeys where preying is for the mightier and those close to cronyism.

    The challenge the RBZ is facing and trying to ignore is the “acceptability of money ” .

    In Finance this is probably the most important characteristic of money . It is the extend to which money is accepted by the general public as a medium of exchange , store of value or measure of value , unit of account .

    You can’t come up with a money form or regulations that affects the Public without consulting the very same Public , they will reject it or rather devalue it deliberately as a form of arbitrage.

    • Againstprof Makuyana is an economist, a chartered accountant and social commentator based in South Africa.

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