DEPUTY CHIEF WRITER
©️ AS ZIMBABWE’S political and economic crises continue to deepen, Nelson Chamisa says the ball is in President Emmerson Mnangagwa’s court to initiate sincere and inclusive national dialogue to help resolve the country’s myriad challenges.
Speaking to the Daily News yesterday, Chamisa’s spokesperson Nkululeko Sibanda also reiterated the MDC Alliance leader’s call for a neutral mediator in the country’s political disputes, as well as his readiness to be part of any plan of action that would ease the pain of long-suffering Zimbabweans.
This comes as Zimbabwe’s economy is fast approaching the horrors of a decade ago when the in the local currency of 50 percent, which economists said would further fuel inflation and cause more price hikes.
Yesterday’s surprise move also came as nurses held protests in Harare, over the recent decision by authorities to cut their allowances — amid growing dissatisfaction among civil servants about their remuneration which they want paid in stable US dollars.
“With immediate effect, all civil servants’ salaries will be adjusted upwards by 50 percent. This increase also applies to all government pensioners.
“In addition, all civil servants will be paid a flat, non-taxable, Covid-19 allowance US$75 per month.
“Government pensioners will be paid a flat, non-taxable, Covid-19 allowance of US$30 per month,” Treasury announced.
“Government has taken due regard of the fact that addressing the wage challenges faced across the civil service, any salary reviews will need to be done within a holistic framework in order to ensure that such a review does not impose negative shock in the market,” the Finance ministry added.
In this regard, all civil servants and pensioners were directed to immediately open US dollar denominated accounts, in order to access their foreign currency payments.
Yesterday’s developments have similarities with how the then administration of the late former president Robert Mugabe introduced the stability-inducing multi-currency system in 2009.
Then, Zimbabwe binned its worthless currency and introduced a multiple currency system which was anchored by the US dollar.
Despite this system having served the country well for more than a decade, Ncube rattled the markets in June last year when he prematurely and ill-advisedly ended the local use of the US dollar and other foreign currencies.
He directed at the time that the Zim dollar be the sole legal tender in the country, without addressing the root causes of its crash and subsequent decimation by hyper-inflation in the run-up to the consummation of the 2009 government of national unity.
Not surprisingly, the re-introduced Zim dollar has collapsed spectacularly against the US dollar on the parallel market — triggering waves of steep price hikes of basic consumer goods and services, and piling untold misery on long-suffering Zimbabweans.
Only recently, former Finance minister Tendai Biti implored the government to re-introduce the multi-currency system — saying this was the only way to stem Zimbabwe’s deepening economic rot.
“As I have argued and stated for donkey years, Zimbabwe never had conditions for the restoration of its own domestic currency.
“Therefore, the process of de-dollarisation was a total disaster which has not worked and will not work.
“Now you cannot introduce a currency when no one trusts you … that is the problem with (President Emmerson) Mnangagwa and Ncube.
“No one trusts them. This economy doesn’t trust them,” Biti told the Daily News’s sister publication, the Daily News On Sunday.
“Secondly, you cannot introduce a currency when you are not producing, because at the end of the day a currency is a measure of your productive capacity measured against the productive capacity of other countries.
“So, at the end of the day your currency becomes the relationship between your exports and imports.
“What needs to be done is that the government must reintroduce, as a matter of urgency, the regime of multiple currencies,” Biti added. The US dollar must come back and the Rand must come back.
“Secondly, the government must remove all restrictions on export earnings. In other words, your export surrender requirements must be scrapped.
“So, two issues and measures around the fungibility of certain shares — in particular the Old Mutual shares — must be allowed to be fungible,” Biti further told the Daily News On Sunday.
Meanwhile, economists who spoke to the Daily News last night said Ncube’s move yesterday effectively meant that Zimbabwe was officially re-dollarising.
They said it was very likely that the hapless Zim dollar would now largely become a medium for speculative parallel market foreign exchange deals, with more businesses and retailers predictably preferring to be paid in US dollars.
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