ZIMBABWE’S MONETARY MISINFORMATION: UNTANGLING TRUTH FROM FICTION AT THE TRADE FAIR

At the Zimbabwe International Trade Fair in Bulawayo, Vice-President Constantino Chiwenga made a statement that left many scratching their heads. He asserted that the recently discarded bond notes, which had been tumbling in value due to rampant inflation and exchange rate instability, were a colonial legacy from Rhodesia’s Ian Smith era. This claim, however, is a historical misrepresentation, as the bond notes were only introduced by Zimbabwe in 2016 under the late President Robert Mugabe’s administration.

The introduction and subsequent abandonment of the bond notes are just a recent chapter in Zimbabwe’s complex monetary history, a history often exploited by officials to push misleading narratives. As Zimbabwe grapples with these monetary challenges, another quasi-currency, the Zimbabwe Gold (ZiG), is being introduced amidst a similar storm of confusion and misleading statements by government officials.

Zanu PF spokesperson Chris Mutsvangwa recently claimed that the ZiG was a return to historical precedents, suggesting Zimbabwe once used bullion as currency—a statement that lacks factual backing. Additionally, Reserve Bank of Zimbabwe governor John Mushayavanhu contributed to the confusion by incorrectly asserting that the ZiG emerged from World Bank consultations, and that criticizing ZiG amounted to criticizing the World Bank itself.

These misstatements have not only muddied the waters but have also severely undermined confidence in the ZiG even before its market debut. This new currency initiative is shadowed by the ghosts of past errors, particularly the claims that the bond notes were backed by a substantial loan facility which turned out to be another falsehood.

Zimbabwe’s monetary system has indeed been shaped by its history with gold, but not as a currency. The nation has a storied past of trading gold as a commodity. During the colonial period, Zimbabwe was part of the gold standard, but gold was never the foundation of its economy—agriculture was and remains its economic mainstay.

The narrative that Zimbabwe’s economy historically revolved around gold is not just inaccurate but also reductionist. Zimbabwe’s true monetary history is richer and more complex, involving various forms of currency from the colonial era to the present day. This history includes the British South Africa Company’s introduction of Sterling-based currency in Mashonaland and the evolution through multiple currency reforms, leading to the adoption of the Rhodesian dollar and later, the Zimbabwe dollar.

The misuse of historical facts by political figures highlights a desperate attempt by President Emmerson Mnangagwa’s administration to stabilize the country’s economy through the new ZiG currency. The government has touted the ZiG as gold-backed, claiming robust gold and foreign exchange reserves to support it. However, these claims are accompanied by increasingly coercive measures aimed at enforcing monetary stability, which historically have proven to be futile.

Furthermore, the introduction of the ZiG follows a pattern observed with other pseudo-currencies like traveler’s cheques and bearer cheques, which have been intermittently used to alleviate currency shortages but have failed to provide long-term stability or credibility. This pattern reflects a broader issue of recurrent economic crises and the government’s struggle to maintain monetary credibility.

Zimbabwe’s monetary history is not just a tale of currencies and commodities but a reflection of its turbulent economic policies and the ongoing challenges in establishing a stable and trustworthy monetary system. As the country stands on the brink of introducing the ZiG, it is crucial for officials to present accurate information and refrain from historical distortions that only serve to further complicate the economic landscape.

Dr. Tinashe Nyamunda, a lecturer in Economic and Social History at the University of Glasgow, provides a critical examination of Zimbabwe’s monetary history in his article, “Money in Zimbabwean History: A Concise Currency Timeline.” His work is a clarion call for accurate historical understanding to inform contemporary monetary policies and debunk the myths that are often propagated for political convenience. As Zimbabwe navigates through these turbulent economic waters, grounding policy decisions in historical accuracy and transparency will be key to regaining public trust and economic stability.