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Can ED turn the economy round

by Dr Masimba Mavaza
09 January 2019 | 1518 Views
Over the last three months, Zimbabwe has been dominated by some ugly headlines from elections squabbles to economic down turn.- It is fair to say the loud silence on the issue by His Excellence did not help the issues actually it fed onto rumour monger machines and speculation took a better part of the economy. And between reckless strikes in an effort to get the attention of the president and admittedly poor execution on administration's part in implementing the latest stage of the new law, coupled with the most ever crippling shortages of fuel in the country nobody has acquitted themselves very well these past few months.  So it's not surprising that the Zimbabwean people's frustrations with ED are at an all-time high. The fuel problems could have been eased if the government had been bold enough to arrest all those hoarding fuel. All those using drums and tanks to drain fuel from service stations and all those selling fuel at black market. The Zimbabweans have been left to lick their wounds and watch helplessly as corruption is displayed openly at all service stations. The fact that despite the gruelling shortage of fuel the government appears completely clueless has made the nation restless. Sometimes when the crocodile is outside the water it snarls and walks towards water if it becomes hot outside. A clever crocodile cannot keep quiet while it's not in the water. A crocodile is known to be very innovative and very calculative. It is that calculation the whole nation waits to see.

But we know that people's frustrations run deeper than these most recent political battles.  Their frustration is rooted in their own daily battles to make ends meet, to pay for school fees, to buy medication, to buy basic needs like bread, to buy the fuel, gas paraffin, to put a roof above his head, to be a provider, these are the basic rights they are denied.  It's rooted in the nagging sense that no matter how hard they work, the odds are always against them.   And it's rooted in the fear that their kids won't be better off than they were.    And that is a dangerous and growing inequality and lack of upward mobility that has jeopardized Zimbabwean's basic bargain that if you work hard, you have a chance to get ahead. People are frustrated that the corruption cases are not going anyway. There is a new crop of criminals surrounding the president; those who charge millions to make investor's meet the president. Those who demand shares in any investor's company so that they will be allowed to operate in Zimbabwe. There is a painful stressful delay in making investors come in the country; the beucracy is a cooking port for corruption. Zimbabwe is tightly shut for business and only sings about the opening. Serious self-search needs to be done in order to solve this problem. The president must act and stop trusting his ministers. He must go back to his early days as a president, he was a listening president. Unfortunately this is the defining challenge of our time:  Making sure our economy work for every working Zimbabwean.  This should be a reason why we have a president, your word is final and your word moves mountains.  It was at the centre of last year's campaign.  It drives everything the office of the president does..  Zimbabwe yearns for a decisive action without fear by those in power. Just a word from the president the fuel hoarders will be arrested and there will be sanity in the market  And I am convinced that the decisions which the president will make on these issues over the next few years will determine whether or not our children will grow up in a Zimbabwe where opportunity is real.

Zimbabwe needs a firm; leadership which will not hesitate to act. People have suffered and all they need is that little movement. Now, the premise that we're all created equal is the Zimbabwean dream.  And while we don't promise equal outcomes, we must strive to deliver equal opportunity -- the idea that success doesn't depend on being born into wealth or privilege, it depends on effort and merit that idea must be made real.  That must be the back bone of Zimbabwe.

Zimbabwe's fuel crisis is deliberately left to persist because there are people who are benefiting. Millions are being made on the blood of plenty. Nobody is monitors or supervise or evaluate things. This is how people are making money out of fuel shortages. The profits being made now in fuel scams in Zimbabwe are obscene and somebody has to stand up and talk.

There is a scandal which is connected with buying fuel with bonds and selling it at one US dollar hard currency on the parallel market in order for them to reorder more fuel. This has created instant microwave multimillionaires without any corresponding value addition. let's look at this outlay

Initial outlay = US$1,000
Transaction 1 - exchange the $1000 @ $3.5 = RTGS 3,500.
Buy diesel at bond 1.34 you buy 2612 litres that is sold for $2612 real money.
Transaction 2, parallel exchange of $2612 @ 3.5 = RTGS 9403.
Buy fuel @ bond 1.34 to get 7017 litres that you push at $1 and collect $7017.
Transaction 3, exchange on the parallel market $7017 @ 3.5= RTGS 24,560 and buy fuel.
RTGS 24,560/1.34= 18328 litres
Transaction 4
$18328 x 3.5= RTGS 64,150
64,150/1.34= 47874 litres
Transaction 5
$47,874 x 3.5= RTGS167,558
RTGS 167,558/1.34 =125,043 litres
Transaction 6
$125,043 x 3.5= RTGS437651
RTGS 437651/1.34= 326,606 litres
Transaction 7
$326,606 x 3.5 = RTGS1,143,120
RTGS 1,143,120/1.34 =
 853,075 litres.
Transaction 8
$853,075 x 3.5 =
RTGS 2,985,761
RTGS 2,985,761/1.34 = 2,228,180 litres
Transaction 9
$2,228,180 @ 3.5 =
7,798,621/1.34 =
5,819, 874 litres
Transaction 10
$5,819,874 @3.5 parallel rate = RTGS 20,369,560
20,369,560/1.34 =
15,201,164 litres
Transaction 11
$15,201,164@3.5 =
Where have you seen such a casino economy? The elephant in the room is the bond. Our leaders must just take a bold decision otherwise we are building a bridge to nowhere. The madness at the Central bank will catch up with all of us very soon, and the consequences will be atomic. We can't continue on this path. The market is distorted big time but will self-correct if we do away with the bond.
Just imagine, from a mere USD$1,000.00 to over RTGS50 million on transaction number 11.
Nobody can believe that this is not known by our authorities. Action must be taken now. Together, we must forge a New Deal; we must declare war on corruption and declare War on Poverty in a great society.  We built a ladder of opportunity to climb, and stretched out a safety net beneath so that if we fell, it wouldn't be too far, and we could bounce back. The economy does not always work for everyone but we must be seen to be embracing everyone in the economic war.

As values of community broke down, and corruption increases unpunished the economy responds in a different way. Zimbabwe does not deserve this; those who are to be arrested must be arrested. The president must offload those around him who have been rewarded in their corrupt ways. Zimbabwe is for all this chinhu chedu mantra must be abandoned It must be our country all of us.     As a trickle-down ideology became more prominent, taxes are slashed for the wealthiest, while investments in things that make us all richer, like schools and infrastructure, are allowed to wither.  And for a certain period of time, we could ignore this weakening economic foundation, at our own peril. And the result is an economy that's become profoundly unequal, and families that are more insecure.

But this increasing inequality is most pronounced in our country, and it challenges the very essence of who we are as a people.  Understand we've never begrudged success in Zimbabwe we aspire to it.  We look forward for mega deals, we all want to bring in investors in the country.  And we expect to be rewarded handsomely for it.  In fact, we've often accepted more income inequality than many other nations for one big reason -- because we were convinced that Zimbabwe is a place where even if you're born with nothing, with a little hard work you can improve your own situation over time and build something better to leave your kids. But now corruption is eroding our Zimbaweness.  

The problem is that alongside increased inequality, we've seen diminished levels of upward mobility in recent years.  The idea that so many children are born into poverty in the wealthiest nation on Earth is heart-breaking enough.  But the idea that a child may never be able to escape that poverty because she lacks a decent education or health care, or a community that views her future as their own, that should offend all of us and it should compel us to action.  We are a better country than this. We are Zimbabwe. We have all resources needed for us to rise high.

We cannot start blaming the pathetic opposition for our failures, we are failing we need to start again.  These problems will be finished in one day, just be bold and make arrests. Thousands are being millionaires because of these problems. We must as Zimbabwe shun this get rich fast syndrome and fairly deal with corruption. We are not to die with our eyes open like fish. We must stand up and be counted.

Zimbabwe is better than what it has been made to be. But government can't stand on the side-lines in our efforts.  Because government is us.  It can and should reflect our deepest values and commitments.  And if we refocus our energies on building an economy that grows for everybody, and gives every child in this country a fair chance at success, then I remain confident that the future still looks brighter than the past, and that the best days for this country we love are still ahead.  God have mercy on Zimbabwe.


corruption fuel crisis Zimbabwean

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Source: Dr Masimba Mavaza


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