The fear continues…

The worries about the Zimbabwean elections that are meant to be held in July 2013 still proceed. I do not think that Zimbabweans and  the other countries that are affected by its problems (importing and exporting countries) will be at rest until the final decision is made. Only then will the minds of Zimbabweans and others be able to accept the result and move on with new initiatives, or should I say plans to help the Zimbabwean economy. As of recent, The African Development Bank (an independent bank) said that, due to some areas of the country having too much rain fall and others the opposite, the newly planted grains have been “written off”. Due to this creating food shortage, it has also lead to the escalation of food prices and more and more Zimbabweans relying on food aid. This would mean that more citizens are starving, meaning that they are too weak to do their jobs (if have) to earn money. This is creating a vicious circle that is depleting the Zimbabwean economy even more. Approximately 242 000 tons of staple food is needed in Zimbabwe to keep the citizens/ customers going before there is new harvest.

It is not just the opposing side of Mugabe that are unhappy, but also the people that fall under him. Simba Makoni, a former finance minister under Robert Mugabe is an example of this. He admitted to himself that “the people of Zimbabwe” (including him) basically live on the edge of their seats, implying that they are all in fear everyday. For someone under Mugabes wing to be in fear is surprising, however those whom are not will be in a worse off position. I agree with Mokoni when he stipulates that this fear that everyone is experiencing should be one of the economies main priority to abandon or at least decrease a great amount. Once this fear has been lifted of citizens shoulders, positivity may fall in place and the country may be more at ease. Another down side that should be changed is the dual presidency between Morgan Tsvangirai and Robert Mugabe. When there are two very opinionated leaders, with different intentions in mind, this is when the tension levels escalate and the economy (politics and economics) gets out of hand. Makoni described this dual presidency as “pathetic” and “dismal”. These are rather harsh descriptions, as they have not completely let the country fall apart. However, there must be a reason as to why he said this, as the country as well as the leadership is not where it should be at this present time? The fact that none of the conditionality’s that will enable the free and fair elections has been put in place almost reflects the “dismal” leadership provided by Mugabe and Tsvangirai. No wonder the citizens of Zimbabwe are living in fear daily. Anything could happen.

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African countries loaning money to African countries? Advisable?

As we all know by now, Zimbabwe has been struggling financially for quite a while now and has had to use many different currencies in order to stabilize the country and help its people survive. Many international countries have helped Zimbabwe financially over the past few years, but not only from the international community, but also South Africa. South Africa has helped Zimbabwe a great deal, which is surprising, but also very encouraging to see. According to fin24, “South Africa has approved more $100m (R905m) in budgetary support to cash-strapped Zimbabwe, helping plug a gap in its finances ahead of elections expected in the second half of the year, Finance Minister Tendai Biti said on Monday (15 April 2013)”.

 

Biti goes on to say that the South African cabinet has made a decision and feels that it is a “positive” one. Yes, it is a very positive call on Zimbabwe’s behalf, but how about South Africa? Not only the effects on the economy of South Africa but also its people? To be honest, South Africa could do with that extra R905million that they ‘loaned’ to Zimbabwe. South Africa is not as stable as it could or should be. The cabinet of South Africa does not need the consent from its people of the country; however, they should take them into consideration. I personally feel that the needs of South Africa’s should come above anyone else. For instance, there are many homeless, starving and sick citizens across South Africa that could easily be cared for with this lump sum of money. The issues of rape and murder could be decreased with money spent on more hidden cameras or more of the police force patrolling.  These are only a few examples that could be improved in South Africa. This decision that the South African cabinet has made may cause many citizens to get upset. They may turn around and say that they want to pay less tax seeing as the country has enough money to support another country.

 

In saying this, I am also very pleased to see that Zimbabwe will be receiving more funds into the country so that they will be able to hold the planned elections in July 2013. Zimbabwe should in fact get as much funds as possible in order to ensure that the elections do run as smoothly as hoped, with many officials overlooking the procedure, and hopefully minimizing the violence and ability to cheat. Zimbabwe should however not agree to the contract of a “loan” if they may not be able to repay the money to the countries that lent them the funds. This will cause great violence and tension, and Zimbabwe may end up in bigger trouble than it already is. The other problem that Zimbabwe also needs to try and resolve is the fact that the amount of money leaving the country for food imports exceeds the amount coming in. the government should rather leave it up to the private farmers to import and export their goods, rather than the government itself and its revenue.

Why should people work so hard for themselves for nothing?

It has been known that over the years, Zimbabwe and South Africa have been through a great amount together. South Africa has definitely helped Zimbabwe a great deal, and been there for Mugabe and its people through all the thick and thin, when others were not there. One example of this is with the imports from South Africa to Zimbabwe, such as food, when there was barely anything on the shelves in Zim. Zimbabwe went from there being nothing to many varieties of South African food goods. However, as Malcom Sharara, from News24, states it in the article that Zimbabwe has a love-hate relationship with South Africa. This is because the trade affair is not exactly even.

 

The governor of The Reserve Bank of Zimbabwe, Gideon Gono said that 60% of Zimbabwe’s’ imports are from South Africa. It is not a bad thing that the imports are from South Africa (at least Zimbabwe is helping another African country produce, and not an international country). It is the fact that the products that are being imported are finished and completed. Not even half-heartedly done. I completely agree with Gono not being happy with this, and the fact that it is not going to help the Zimbabwe economy grow, because they are spending more on imports than they are selling as exports.  The people of Zimbabwe are slowly getting unemployed or staying unemployed because there are no available jobs for them, due to the fact that all the products are completed in South Africa. I for one know that this is not because the people in Zimbabwe are incapable of producing the same product; it is because there are no resources in Zimbabwe such as the machinery and raw materials. This is what Gono is trying to put across which is extremely delightful to see that someone in Zimbabwe is actually stating the obvious and trying to sort it out. This is on of the basics that Zimbabwe is lacking and so from here onwards it could hopefully only get better.

 

Trade has increased from $4.6bn in 2011 to $5.9bn in 2012. This is not a bad thing that trade has increased, because this is what is actually help keeps the economies going, and some people satisfied. However what needs to be changed is the fact that more foreign currency is leaving Zimbabwe than is coming in, making it poorer. When the people of South Africa want to invest in Zimbabwe, the problem lies with them trusting the economy and making sure that their money is safe. As soon as there is any failure in Zimbabwe, Mugabe is not afraid to take anyone’s assets away from them in order to help the economy. Not even an explanation is needed. Why should people work so hard for themselves for nothing?

Multi-currency or not?

It was about a decade ago when Zimbabwe went into recession, and the country struggled a great deal with petrol shocks, economic crisis, food shortages and homeless people. The reason for this big problem was because there was such great inflation. The Reserve Bank of Zimbabwe carried on printing more and more Zimbabwe dollar notes as soon as they ran out, which created hyperinflation therefore decrease the value of the Zimbabwe dollar. This what lead to Zimbabwe using multi-currencies/ international currencies such as “the United States dollar, Botswana Pula, British pound and South African rand to stem 
hyperinflation that had made the local unit worthless”, said Ndamu Sandu.

One Hundred Trillion Zimbabwe Dollars

One Hundred Trillion Zimbabwe Dollars

When Zimbabwe started using these different currencies, it definitely did help the situation in Zimbabwe a great deal. There were very few or no petrol ques and there was food on the shelves that was imported from South Africa or produced in Zimbabwe. However, this does not mean that the full economic crisis was resolved, as one can see that Zimbabwe is still struggling with the violence and politics that is taking place. And the country does not look nearly as close to how it should look, such as the conditions on the roads, shops, schools, business etc. I have witnessed this with my own eyes. It has been very good for the country and its people to use multi-currencies in order for the country to be more civilized. In saying that, Zimbabwe is seen as an independent country and so I feel that it should and would be advisable for Zimbabwe to have its own currency again. If the Reserve Bank of Zimbabwe did what a bank is supposed to do and not just print money because the feel they need to, the Zimbabwe dollar would hopefully stay strong and the economy would work in the way it should, with the people working and bartering with one another so that the economy flows naturally.

With the new constitution of Zimbabwe and the elections that are hopefully going to take place in July, Zimbabwe might bring back their own currency? If so, I feel that it is extremely wise for them to approach the Economic Commission for Africa (ECA) for advise on how to go about controlling the hyperinflation and resolving the ‘economic shocks’.  In doing so, Zimbabwe’s economy may improve dramatically, however the central bank must not print notes as soon as they see a shortage. The international community whom has strong economies already must control that this does not take place.

 

International Community getting involved?

The most recent news on the agenda in Zimbabwe, which was announced the 9th March 2013, it that the leader of MDC, Morgan Tsvangirai, has pleaded to implement the International Community in order to over look the elections and so that all procedures will hopefully try and run smoothly with minimum or no sign of violence at all. It would be a great pleasure and a massive change for the citizens of Zimbabwe to participate in smooth running elections for one, as “ this is Zimbabwe’s most important election since 1980”. Hopefully by allowing the International Community to over look everything, these elections will really be “free, fair and transparent”.

One would think that the MDC has done this in their favour, as they know the power and strength that Mugabe is capable of. You could say that a ‘leopard never changes its spots’ to clarify this point, and you can not blame the MDC party for being worried that the voting of the referendum as well as elections could go sour, as they have done so in the past. If Tsvangirai and his party had to win, and there was an outcry from Mugabe’s side, the MDC will have enough support to lean back on and prove that the elections were fair.

The constitution has also been an expensive and long process, which does not need to be altered by little implications and let it go to waste, which is what the International Community can prevent. The call that Tsvangirai has made here is an extremely clever and vigilant one, showing true leadership skills, which hopefully he can carry through if the elections go his way.

Due to many of the foolish mistakes that Mugabe has made in the past, which led Zimbabwe into an economic or financial crisis, this problem has crept up on us again. As mentioned above, the cost of the referendum and the election that is taking place in July is outrageous, which means that the country will struggle, stated by the Minister of Finance, Tendai Biti. These mind blowing figures are as follows: US$85 million for the referendum and the elections costing a further US$40 million.  This ultimately means that Zimbabwe is going to also have to ask the United Nations, without hesitance, to assist them through this important time, which may ultimately end Mugabe’s 33 years of power. Biti said that it is vital that Zimbabwe get financial help from the International Community.

This referendum of the new constitution does indeed need to take place this coming weekend, on the 16th March so that the elections in July can happen. It is extremely important and crucial that all runs smoothly with sufficient funds because Zim still has the potential to improve dramatically – definitely in the long run.

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