Page 64 - Msingi Afrika Magazine Issue 27 Final
P. 64
Economy
taxman, the Reserve Bank, of the economy, increasing individuals who also want to
our commercial banks as demand for US dollars save in US dollars or gold and
savings or reinvestment in and inversely reducing the externalize them, because
the economy, to facilitate a demand and value of Zim like Cecil John Rhodes, they
seamless foreign exchange dollars. see Zimbabwe as a cash-cow
system. colony to make US dollars
So why don’t Zimbabweans (or gold), externalize them
Then the little forex that get tired of hoarding these and spend them in nations
trickles back to the country US dollars to break this they desire to live.
is immediately used to cycle of a depreciating local This is why you see that
import fuel, cars, medicines, currency? most of our top ten biggest
electronics, inputs, luxuries companies on the Zimbabwe
and machinery, which are The biggest problem is Stock Exchange have multi-
then sold in U.S. dollars on foreign companies like Pick billion dollar businesses
the local market. n Pay, PPC, etc., and foreign outside Zimbabwe, but the
Even the government and investors like BlackRock, question is how did they get
its municipalities demand Sanlam, Allan Grey and billions of US dollars out
US dollars for the provision others who are slowly of Zimbabwe with the strict
of public services because dominating our economy, foreign exchange controls
they can’t stop importing are allowed to repatriate that have prevailed in our
expensive foreign vehicles, a hundred percent of their country?
while civil servants demand profits out of Zimbabwe. So It’s because they laundered
to be paid in US dollars so they either transact in dollars the money out of the country
that they can buy the basics or they take their local as US dollars or gold bought
that are sold in foreign currency to the black market off the black market and
currency in our shops. and hoard dollars or gold laundered them out through
in order to repatriate their transfer pricing, under-
Consequently, no profits. invoicing and smuggling
Zimbabwean wants to hold money bags out of the country
Zim dollars, whether backed In fact, it is these U.S. dollars to other locales.
by gold or not, because that attract particularly South
businesses, investors, and African companies to come This is why, according to the
even the common man desire to Zimbabwe to hedge their U.S. Bureau of Economic
only foreign currency, which rand depreciation losses or to Research, Zimbabweans
causes the local currency to diversify their earning from are the fourth biggest
lose value and making it less South Africa. externalizers in the world,
attractive as a store of value. with over 63% of Zimbabwean
This, creates a perpetual cycle Then we also have GDP in savings, sitting in tax
that sucks US dollars out Zimbabwean companies and havens. This is not counting
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