Tawanda Majoni There is a trending theory in Zimbabwe that says if you borrow quid from the bank and you take “too long” to repay it—never mind the agreed terms with the lender—you are using that money to spin more on the back market.
It’s not yet clear who, exactly, propounded that theory. But then, Zimbabwe is never short of theorists, especially conspiracy theorists.
The “borrowing theory” makes such sense to the government. Together with the “gold coins” theory, it is such a big thing and is being used to explain the fundamentals and matrices of our economy.
No wonder, as you will remember, President Emmerson Mnangagwa recently banned people from borrowing from banks. Pressure from technocrats and the people brought him to heel, but that hasn’t removed him from that school of thought.
We are told that, just last week, he and his deputy, Constantino Chiwenga, summoned some borrowing culprits—notably Innscor—and gave them some harsh talking to. Reports indicate that Chiwenga came out guns blazing. He is a former army general, so the pun is relevant.
The naughty and nosy media reports say the VP described people and institutions that were fuelling the forex black market as enemies of the state. That apparently got Innscor directors quaking in their socks and, as we also hear, they are now busy returning the monies they borrowed from the banks. It’s not wise to assume that’s what he said in fact, but the reports say the VP warned that the armoury holds a bullet per enemy. If true, that’s a bit scary coming from an ex-soldier!
Here is the thing, though. It could just as well be true that companies are borrowing huge amounts of local currency and using it to buy foreign currency on the black market. The motive would be two-fold. One, to make lazy, illegal super profits overnight.
Two, to ensure viability of the companies. We are living in such an inflationary environment. It’s difficult to manage your accounts when the local dollar is spinning like that. Also, most, if not all, these companies are importing goods and services. Since the local dollar can’t cross borders, the only option is to use forex. Now, forex is in such short supply on the formal market. This, then, forces the companies to resort to the black market to acquire forex.
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It’s also possible that the companies are doing both—going to the black market as a survival mechanism and, in the process, to generate super profits.
But, whatever the heck, it remains illegal to trade on the black market. And it remains true that the black market is one of the key drivers of inflation.
Just that it becomes too hasty and half-baked to talk of these companies as if they are the real and only “enemies of the state”. If they are doing it out of greed, fine, it’s proper to call them that. If the motive is to sustain their operations and keep afloat, you can give them the benefit of doubt. If you ask me, it’s better to have companies trading on the black market than shells and ghosts in our industrial areas.
While some of the companies may answer to that serious accusation of being enemies of the state, the fact of the matter is that bigger culprits are in government itself.
Have a look. There is an undeniable, unavoidable, unbreakable link between democracy and the economy of a nation. The two are so entangled that there in no way in which you can choose to rule badly and still have the economy ticking.
Good money hates bad situations. Bad perceptions and bad images beget bad situations. The government and its agencies have been creating bad situations through undemocratic practices and, as a result, good money is reluctant to play ball.
If good money refuses to play ball, then the economy will not perform well. And one indicator of an ill-economy, as is the case with our situation, is an inflationary environment. You don’t need to read books on economics to know this.
There is such a huge democracy gap in Zimbabwe it would be foolhardy to think that the economy can still work properly. Take the example of Job Sikhala who the state is accusing of defeating the course of justice by and inciting public violence. He may just as well be guilty as charged, but the manner in which the courts—which are part of government as it were—are handling the matter is just not right. For a long time, Sikhala has been denied bail and today is his 61st day in prison.
The thing is, there doesn’t seem to be good proportion between what he is being charged with—posting a video—and denying him his freedom for this long. This leaves the perception that Sikhala is being punished for his political activism.
Sikhala’s case is just one among many others whereby the courts have been used to persecute critics of government. That’s not democracy. You, then, can’t expect good money to come to such a bad situation.
So, whoever is responsible for this lawfare whereby you punish people by jailing them unnecessarily must also be considered an enemy of the state.
The list of enemies of the state must also include public office holders and public agencies that are contributing to the poor performance of the economy directly and indirectly by not doing what they are supposed to be doing.
In early 2018 Mnangagwa drew up a list of companies and individuals that had externalised millions, if not billions, in forex. His government promised that it would get these offenders to return the money. If this money had been returned, there would be better liquidity in the market. Which means there would be more money to allocate to companies through the auction or other systems, thereby minimising the chance of them going to the black market.
Unless things were done silently—which is highly unlikely—these millions have not been returned. The reasons why this hasn’t happened, we don’t know but can only speculate. This means that there has been dereliction of duty among our top decision-makers. Since they have neglected what they were supposed to do, they are also enemies of the state.
Still on dereliction of duty, we are still in the dark about those companies that the RBZ nailed as having taken huge amounts and used them to buy forex on the black market a couple of years ago.
Remember the three companies whose bank accounts were temporarily closed in 2019? The RBZ swooped on Sakunda, Croco Motors and Spartan Securities for allegedly trading on the black market and causing rates to spin.
We don’t know how the authorities dealt with those companies. This speculation would always have currency, based on the fact that their owners are strongly suspected to be linked to powerful people in government.
Let’s assume that the three companies were among other companies that were doing bad things with good money, what reason do we have to believe that they have now stopped, considering that the rates are once again in overdrive? Are these also not enemies of the state? And are the authorities that are failing to take proper and decisive action not enemies of the state?
It seems the VP and his boss will be doing a lot of shooting because even the ministry and public departments that they superintend over are also enemies of the state. After shooting those that run the public entities, they would then have to point the guns at their own heads because they are the ultimate bosses who we hold accountable for the running of those public institutions.
This makes sense when you get to know that these public institutions are contributing to the turbulence on the black market. They are paying their suppliers using black market prices. The payees then rush to offload the local currency on the black market. In some cases, the parastatals are paying companies huge amounts of money without a single thing being delivered. If you know, you know.
- Tawanda Majoni writes in his personal capacity and can be contacted on majonitt@gmail.com.
