The Pot ‘o Gold Coins, Chamisa’s Chikurubi Visit

 Weekend reflections with Sabhuku Nhopi

The Pot ‘o Gold Coins, Chamisa’s Chikurubi Visit

29 July 2022

Introduction

There have been many political developments in Zimbabwe this past week with far reaching impacts on the future of Zimbabwe and its prospects for economic prosperity. When political leaders make decisions, they should not only look at solving today’s challenges but they must also look at how their solutions to today’s challenges may affect the country’s ability to solve future challenges. The Pomona Deal is one classic example of leaders having myopic thinking but we will discuss the deal in future WRSNs. Before we talk about the devil in the detail of this stinking deal, why don’t we talk about other developments which also happened during this week in focus. We saw Reserve Bank Governor John Panonetsa Mangudya introducing the Gold Coins as a ‘lasting’ solution to Zimbabwe’s decades long economic challenges, Chamisa being denied to right to see incarcerated CCC lawmaker and the Ali Family Lawyer Job Sikhala.

Pot ‘o Gold Coins

We are here now as a country using gold coins as a mode of exchange as they were this week introduced in the market for use as legal tender in Zimbabwe. We seem to have come back to barter trading with the only difference being that the gold is shaped in a circular shape and priced far above the actual value of gold materials on the coin. The currency woes seem to have been parasitic to the Zimbabwean situation from the turn of the millennium. The case became so prominent in 2009 when it became abundantly clear that the Zimbabwe dollar was not going to be of further use as a medium of exchange. To give some perspective, the Zimbabwean Dollar was introduced in 1980 replacing the Rhodesian Dollar which when it was introduced was 1:1 with the US Dollar back in 1970. In 2006, 2008 and 2009 this dollar was redenominated by simply slashing some zeros from the currency. In today’s terms a ZWD1 is now worth more than 10²⁵ or ZWD1 duodecilliard in the first dollars. The currency had become worthless because of various factors - an analysis for another day - but to arrest the situation, the authorities came up with a plan to introduce pseudo currencies as legal tender. Around 2002-2003 the Standard Chartered Bank in partnership with Cargill Cotton Group started issuing Emergency Bearer Cheques with a 6-month expiry time limit which were followed a year later by the Bearer Cheques. These were popularised by political jingles appearing on ZBC TV. Although they were very popular, they couldn’t arrest the hyperinflation such that Special Agro Cheques were introduced in 2008. This was initially targeting the farmers but they were so widespread that the whole country ended up using them as well. With large numbers of notes printed, the quality and security features were compromised. In 2016, Bond notes were introduced and later supported by virtual dollars better known as RTGS or Real Time Gross Settlement. Today one can buy these Zim dollars on major ecommerce websites like eBay at a value far much more worth than their value when they were issued. In all these monetary interventions, the economic problems especially hyperinflation kept on coming back. In Finance Ministry’s Permanent Secretary George Guvamatanga’s words, the financial woes in Zimbabwe are as a result of economic saboteurs. 

It is my passionate view that the very economic saboteurs are those who purport to be trying to find solutions to the problems they created. With this week’s gold coins being introduced, the concept is fantastic but it is being used in an environment that is not conducive for economic growth. When the politics is toxic, the economics will be toxic as well. Imagine the Federal Reserve Bank of America giving touts USD to go and scout for say Chinese yen in the streets and still expect the USD to perform well.  Like the list of all other monetary interventions, these gold coins will fail as well, maybe no wonder RBZ Governor Mangudya didn’t bet this time with his job like he did last time with the bond notes.

Zimbabwe is a very beautiful country with so many minerals to make all its people including those in the diaspora rich for many generations. In fact, the suppressed population growth of the country as shown by the recent Census figures are a sign of an economy failing to provide adequate resources for its people.  In 1990, Nigeria had a population of 100 million people, in 2020 that figure had more than doubled to 206 million people. In 1990, Zimbabwe had 10 million people and in 2020 the country had 14 million people. The rate is so slow largely due to emigration and poverty to sustain the population as well as low life expectancy. When there is economic mismanagement and rampant corruption the result is a failing economy and several Statutory instruments and multiple currency reforms that almost always seem to take the country on a merry go round.

The gold coins follow the royal mint concept from England, the only difference is they can be used not only as a store of value but to transact as well. They cost USD1800 to own one with an initial quantity of these coins being 2000 coins and potentially more depending on the demand. The one ounce 22 carat gold coin termed Mosi-oa-Tunya (The smoke that thunders) has major drawbacks in that they are only operational in Zimbabwe and can’t be used outside the country which will make citizens revert back to demanding or preferring the USD which is easily tradeable outside Zimbabwe. Unless Zimbabwe signs agreements with other countries, the impact of these coins will remain a pipe dream. Secondly, they will fuel more inflation as they will in less than 1 year lose their initial value. Moreover, ordinary civil servants can’t afford even 1 coin with their salary so who are they made for? The other downside is that if the coin is stolen, one would have lost a fortune. Their value (the value of the actual Gold on the coin) is by far less than the actual value which is the Government’s way of mopping up USDs in the market and stifling public expenditure. 

We all know how extravagant and imprudent the government is when it comes to expenditure as a result the gold coin scheme will only fuel more inflation. Although gold coins are used in Australia, China and South Africa as a means to cushion against inflation, their economies are well functioning yet the drivers of inflation in Zimbabwe will soon render these coins worthless in a few months or years. Just as the Bearer Cheques are worthless today so will be the gold coins in the future, watch. Zambia's currency today is the 3rd best performing currency in the world. They didn't introduce Gold coins did they? They arrested foreign debt, reduced government expenditure, and are fighting corruption which is one way of killing a country's economic prospects. The gold coins are the pain killer which Zimbabweans are forced to take without diagnosing the real cause behind the economic headache. 

Chamisa’s Job Sikhala Visit at Chikurubi

How will the country’s currency perform better when some opposition leaders are being barred from visiting their lawmakers who are wrongfully jailed? Worse still being threatened with death. Does it mean anything CCC is like a bag of weed at an airport that no one wants to be associated with. Moreblessing Ali was murdered, Job Sikhala, a member of Parliament was arrested for ‘inciting violence’ at the funeral of the lady murdered and found in a well in the back yard of a Zanu pf community leader. Sikhala has been denied bail after many attempts with the court still to grant him bail. Within the same time another Zanu pf community leader and a Bishop of a Church threatened Nelson Chamisa with death. I thought church leaders are supposed to be preaching peace to their members whether they are talking politics or church matters. Now which is a weightier crime, ‘Inciting violence’ and threatening someone with death? Of course we know for sure that those inciting violence charges are fabricated. The reason given for the refusal to grant Chamisa permission to see Sikhala was that he is a prominent politician so he needed authorisation from the powers that be. When Chamisa’s car was being sprayed with bullets didn’t they realise that he is a high profile politician? When they peddle propaganda in the print and broadcast media don’t they realise they are doing it to a very high profile politician? It does seem that Chamisa is only high profile to suit the narrative of denying him access to see Sikhala yet vilify him when it suits the establishment. We are all Zimbabweans and the constitution is no respecter of persons. He was supposed to be granted access to his interim Vice National Chairman. If Job Sikhala starts supporting the regime today, how many days will he last longer in the prison? The move was designed to deny Chamisa the right to see and encourage his comrades and also to sow division within the party. Sikhala is not only Job, Sikhala is all Citizens and he does not only reside in those four reinforced Chikurubi concrete walls, but he also resides in the hearts of millions of citizens and they will not waver in their support and solidarity for him and many others wrongfully arrested. It is these things which dent the economic prospects of a country such that the supposed gains expected to be brought by the gold coin will be quickly and easily eroded by the partial application of justice. In any case which investor would want to invest in a country which does not even honour and respect the rights of its citizens.

Conclusion

The discussion focused on the gold coins which were introduced last week as well as Chamisa’s visit to Chikurubi which needed authorisation from the top. Whatever happened to judicial independence, nobody knows. This WRSN was also meant to cover the Pomona deal and Beatrice Mthetwa’s letter about the police needing to arrest Bhito but that is a subject for another time. The write up concludes by saying, as long as the politics of the land remain toxic, and communist ideologies being applied in a democratic state, the gold coins like the Special Agro Cheques will be worthless in not so distant a future.

Sabhuku Nhopi is a political commentator you can find him on sabhukunhopi@gmail.com or follow him on Twitter @Sabhuku Nhopi or like or Subscribe to his music on his Youtube channel @Sabhuku Nhopi.