The Sunday Mail
The adoption of the multi-currency system about half-a-decade ago brought an incomplete monetary system that is not compatible with our economic architecture.
While the rejection of the Zimbabwean dollar by the populace in 2008 was justified, since the local currency had lost some cardinal characteristics of good money, it is ironic to observe that the nine currencies we are using right now actually do not meet more characteristics of good money compared to the condemned Zimbabwean dollar.
What then should we do with the multi-currency system, which has committed many sins if the Zimbabwean dollar was crucified for less sins?
Poor Zimbabwean dollar!
It will not be prudent for me to continue with this kind of talk without citing facts, lest I may be accused of making reckless allegations. I will, therefore, attempt to utilise the remainder of this space to give sense to my serious claims above.
The Zimbabwean dollar was rejected largely for failing to meet the twin virtues of stability and portability.
The money was being wiped away by inflation and rapidly losing its value by the hour.
This militated against the very functions of money, such as store of value and standard for deferred payments. I remember when people would go to town at a certain amount of bus fare, only to go back an hour later when the fare had doubled.
I remember, too, when one would buy a car on credit only to pay the money when its value would be only enough to buy an egg. Sad!
The Zimbabwean dollar was also printed in huge quantums, going against the ideal attribute that money has to be in limited supply. As it started to lose value, one would move around with a plastic bag of money to buy little things.
Who would want that kind of currency? Who again wants the kind of monetary system we are contemporarily using?
Apart from failing to meet a number of good attributes of money, the multi-currency system is also beset with a number of flaws that even makes its definition of money become dubious. If money fails to perform its functions, should we call it money?
If you eat something that kills – should you call it food or poison?
Dollarisation, for starters, failed to give us the divisibility that money requires. We have been operating with no adequate coins since the beginning of dollarisation, which has also affected the pricing system as many things on sale are rounded to a dollar.
Although we are bringing Rand coins and minting token coins for US dollar change, the problem of indivisibility will remain for the seven other currencies that we are using, not only in coins but in notes as well.
Money must be generally acceptable to effectively play its primary role as a medium of exchange.
However, you find the Rand being rejected by many vendors in Harare. I also doubt whether any vendor will accept a Yen or Rupee to buy, say, airtime. This is despite the fact that those currencies are legal tender, which should be accepted for the settlement of debt.
I wouldn’t blame the vendor for rejecting money that he does not know.
Cognisability is another key attribute of money.
It means that money must be easily recognisable.
Good money must also be difficult to counterfeit.
However, there are many cases where people have been unwittingly swindled of their hard-earned money in exchange for counterfeits. The Rand and dollar are often prone to this misfortune. We did not have notable cases of counterfeit money during the Zimbabwean dollar era, compared to now.
Just a few days ago, I remember reading about one Tawana Bocha who was jailed for 14 months for attempting to use counterfeit currency.
It gets scarier to imagine if my mother, who is illiterate, is given change in counterfeit notes then gets arrested after trying to use it.
A friend of mine, who is a till operator, almost lost his job after processing a US$500 EcoCash cash-in transaction in return for counterfeits.
Although these currencies have security features that can be checked to determine their authenticity, it is unfortunate that no one is teaching members of the public that important information. Thus, they continue to suffer at the hands of these counterfeiters.
Counterfeiting gives these conmen a claim against goods and services that they clearly are not entitled to, for they will have not done any productive activity to earn it.
Why should they eat free lunch?
It is unfortunate that although the monetary authorities have approved nine currencies as legal tender in this monetary system, they have not taken the task of educating members of the public about the security features of these monies.
Here we are talking about not less than 100 types of different notes!
In light of the above, education on security features of money is a very important exercise that fosters that money is difficult to counterfeit. Counterfeiters will retire their printing presses, as they will know that people can easily spot their fake notes.
While good money must be homogeneous, we apparently don’t have that virtue in most of the notes and coins from the currencies we are using.
Take the R5 coins, for instance, which come in all shapes and sizes. The same can be said about R2, not to mention some notes, too.
This makes identification of money complicated and also affects its acceptability. We didn’t have this kind of problem when we were using our own currency.
If the multi-currency monetary system were really effective, then we wouldn’t be also having barter trade proliferating in the countryside.
Even in townships, too. Instead of paying a dollar to have your bucket of maize milled, you pay with a gallon of maize instead.
Just when we thought barter trade was left for kuripa ngozi and lobola, it is fast descending to even basic goods.
Barter trade is, however, known to present serious challenges to the parties trading.
The main challenges arise from the difficulty of deciding equal values, the necessity for a coincidence of wants for trade to take place and the indivisibility of large items.
While dollarisation continues to commit all these sins to our innocent economy, we remain confused about the return of our own currency. We continue to vow that the multi-currency system shall continue treading indefinitely.
What stops us from bringing back the local currency by 2018?
Those who believe that we cannot have the Zimdollar back by 2018 are lucidly declaring their lack of confidence in Zim-Asset).
The pre-conditions that have been outlined for the return of the Zimbabwean dollar by Finance Minister Patrick Chinamasa can all be met even if Zim-Asset is implemented only to 75 percent.
So, why should we say we don’t know when the Zimbabwean dollar is going to return?
Is it because we think Zim-Asset is not achievable? Where is our faith?
Addressing the 69th Session of the United Nations General Assembly, President Mugabe said Zim-Asset “is a bold and achievable development programme”.
If we have such a bold and achievable policy that brings all the pre-conditions for the Zimbabwean dollar’s return to the table by 2018, then what stops us from speaking with confidence that the Zimbabwean dollar will be back by 2018?
