I will always recall a statement in a national executive meeting of the MDC in its early days when one of our elder statesmen, who was a senior Zanla war veteran, stood up and simply stated “freedom is important”. Just that he stated it as a primary truth which had application in all areas of party policy and activity.
The fight for liberation throughout the world has been a struggle for freedom – freedom to choose who will govern us; freedom to choose who we mix with and are associated; freedom to choose where we live; and freedom to decide how we will live.
People with power have most often throughout history tried to limit our freedoms – freedom of choice, speech and movement.
But today I want to discuss economic freedoms. When we formed the Government of National Unity (GNU) in February 2009, the Minister of Finance stood up and made a simple 30 minute statement. In those few minutes he lifted all exchange and price controls, all restrictions on the sale of gold and imports, currency and controls were abandoned. Things we had taken as given for 50 years were swept away. Zimbabwe became the freest economy in the world.
The resulting surge in growth of state revenues was dramatic.
In weeks, shortages of fuel and food vanished. Where did the hundreds of millions of United States dollars come from to make this possible? Inflation, which was doubling prices every few hours, fell to -7%. What did the GNU leadership do to make these dramatic changes? They simply gave Zimbabweans economic freedom.
The effect was like letting a genie out of the bottle. I walked into a supermarket in Harare, which weeks before had been completely empty with one till operator on duty.
Now it was packed to the roof, 45 till points were flat out, millions of US dollars were changing hands daily. After years of buying fuel from shadowy dealers who operated from home, we could once again drive into a filing station and say: “Fill it up” and pay a price which was displayed on the forecourt. Three young Zimbabweans who were delivering bulk fuel to the station walked across to me and said: “Eddie, don’t change anything, we are having so much fun” and in the process making money.
When Zanu-PF came back into absolute power in 2013, they immediately went back on these freedoms. Today we have exchange controls, political pressure on prices, inflation is back and rising, shortages are appearing and import restrictions are back.
Am I surprised that confidence has vanished, revenues to the state have declined 25% and cash is almost impossible to obtain? Not at all – all these problems are the outcome of Zanu-PF removing the freedoms we got in 2009 after the complete collapse of the economy in 2008. Although it was our present Minister of Finance who made the changes in 2008, he seems to have no idea as to what to do to combat our present difficulties.
The messaging at Davos in Switzerland was designed for an elite audience and an impact was made, but that will not win him an election that is now just around the corner. That will be decided on real bread and butter issues.
In 2009, it was not then finance minister Patrick Chinamasa or former president Robert Mugabe that gained the credit for the dramatic changes that affected every Zimbabwean and gave them a rapid increase in their incomes and living standards, the credit went to Tendai Biti and Morgan Tsvangirai.
Today, people are saying the changes in leadership have not improved anything. We are still sleeping outside banks trying to get our own money out of the banks to feed our families.
“They” say that inflation is 3% – but we all know that it is 30% or more and many prices have doubled or even more, we know our salaries are buying less and what we have in our bank accounts is not US dollars, it is something else and shrinking.
All the solutions proffered by the government – Mnangagwa, Chinamasa and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya – are not taken seriously. They in fact are not the solution. The real solution is to simply give Zimbabweans back the freedoms they got from the GNU in 2009 which swept away the problems that had brought us to our knees in 2008.
We need to take exchange control from the RBZ – give it back to commercial banks and allow the market to allocate and value the different forms of cash in the market. We need to abandon import restrictions and allow people to import what they want and use their money in any way they feel is best for them, after all it is their money.
We need to re-introduce a proper local currency and draw on the experience of others as to how to manage the new means of exchange and make sure that it cannot be used by the Finance minister to fill the fiscal gap in his budget. The Finance minister must find a solution to that by pursuing the tried and tested means that others who have walked that road have followed with success.
It is not rocket science – Botswana, Zambia and Mozambique have all done it successfully. We know what needs to be done – get on with it and stop trying to fix market-driven problems with non-market solutions that simply do not work.
Cross is an economist, industrialist and MDC-T MP for Bulawayo South. These weekly New Perspectives articles are coordinated by Lovemore Kadenge, president of the Zimbabwe Economics Society, email: firstname.lastname@example.org, cell +263 772 382 852.
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