Thread by @freemanchari

1. I am not against the ZWD. What I am against is guerrilla economics that bankrupt pple. In 2008 everybody in Zimbabwe was reduced to a pauper overnight by an arbitrary nocturnal decision by Chinamasa. In 2016 we were told Bond note is 1:1 and backed by Afreximbank.

2. The government lied and pple swallowed. Now a person who believed the Govt is now 10 times poorer that if he had not listened to them. What does backed by means? If this govt was sincere, it wld buy back all the bond notes in circulation at the 1:1 rate ...

3. The truth is they cannot buy them back because they lied to us that the Bond Note is backed by some facility at Afreximbank. They printed more bond notes without regard and fueled the parallel market to help ZANU PF campaign. Now we owe $4Billion USD to local mafia...

4. The banning of multi-currency has come at a very wrong time. We are in the middle of a drought. We have no wheat , nor maize nor sunflowers which means we still need to import wheat, cooking oil and all other basics. We have no local alternatives to anything..

5. People still need rands & pulas to survive. The question is will they be able to exchange the ZWD to rands easily and equitably? If we have plenty supply of forex then Great! If not then those with forex will still dictate terms in Zimbabwe.

6. The RBZ has only 2 options, to liberalize the exchange rate or subsidize a lot of things. The later is scary because it takes us back to the Gono era where the Central Bank dabbled in a lot of quasi-fiscal activities. Liberalizing the exchange rate demands 2 things ...

7. Either RBZ stops generating new RTGS numbers and oversupplies the market with forex, while restricting tendering with any other currency. Which is what Mthuli is trying to do. The assumption is the RTGS will be scarcer & everybody wld want them while forex is in huge supply..

8. This obviously will result in the firming of the ZWD. But 3 conditions have to be met. 1. RBZ stops generating new RTGS numbers or printing Bond Notes.
2. RBZ floods the market with forex
3. RTGS/ZWD become the sole legal tender in Zim

9. The question is whether RBZ can withstand political pressure. If that fails then the second option is to spiral back to devaluation. But why wld anybody want ZWD when we have no bread, furniture or cooking oil? Its only use wld be to exchange for Rands and externalize

10. That is why I am saying, this was implemented at the wrong time. Apart from macro-economics, focus shld have been on import-substitution strategies. In particular Stembiso Nyoni shld have been the busiest minister in Zimbabwe but what a waste!

11. Commercializing & retooling Agriculture shld have been seen as a priority. In particular we shld have seen more focus on reclamation of idle land & incentives for productivity & diversification. Instead we see more controls on maize. In a nutshell the ZWD is not of much use.