Too early for Zimdollar return

Even politicians must recoil to learn that bankers actually want to return to the period of hyperinflation and a currency with so many zeros that brought grief to our education system.
What should have happened, when the multi-currency system was introduced, was to convert a portion of bank accounts into US dollar equivalents.
This is what West Germany did when the former East Germany collapsed and became a combined German Republic.
The East Germany currency was useless but the East Germans were given an equivalent of the West Germany strong currency.
What it meant was that their accounts were credited with West Germany currency.
Today, Germany has not suffered from the euro crisis as other European countries.
Zimbabwe should have credited a portion of the Zimbabwe dollar accounts with multicurrency but kept it locked up in the banks as collateral.
The writing off of Zimbabwe dollar accounts affected people’s morale and bankrupted them.
Imagine, insurance policies, pension funds and other Zimdollar accounts were rendered useless overnight.
If this was what the top banker referred to as the multi-currency being harmful to the economy, then it would have made sense.
It is not too late to create these conversions of Zimdollar accounts into multi-currency accounts.
No one is saying the trillions in Zimdollar accounts could become trillions when converted to multi-currency.
After nearly four years of the introduction of the multi-currency system, surely the economy has stabilised to the extent that the financial system can afford to convert a portion of Zimdollar accounts into multi-currency.
Like I have proposed, these accounts will remain frozen but can be used as collateral by borrowers be they business people in the private sector or ordinary people making investments in building their own houses or starting a small business.
The other way that can be used to underwrite this system is to recapitalise the Reserve Bank of Zimbabwe.
What it means is that a portion of the gold mined should not be sold but kept by RBZ to start building foreign currency and gold reserves.
A percentage of the exports earnings could also be used to recapitalise the RBZ.
Many people understand that using a foreign currency you cannot print has its limitations especially, when budgeting.
The system does not allow for an increase in the volume of money in circulation.
The country has to earn every US dollar in circulation by exporting more goods and receiving more investment.
The foreign direct investment has to be in those productive areas where the country can earn foreign currency.
It should be easier now to attract FDIs in an economy that is governed by the multi-currency system. But why is it that foreign investors are shying away?
Many theories have been advanced to explain this. The most common of them is the Indigenisation and Economic Empowerment Act.
Indigenisation is being portrayed as policy of grabbing assets of investors without paying anything.
The noble idea that indigenisation is a way of the locals participating in the economy of their country is swiftly dismissed.
Another reason is that the investors are wary about the lack of return on their money especially in the productive sector as markets for goods is very tight at the moment.
Where there is a vibrant domestic market for goods, it is easier to attract investment in a service economy.
Take, for example, investment in the generation of electricity. It has been reported that many investors in energy would not be able to recoup their investment if the price of electricity is low and the culture of non-payment remains quite prevalent.
The customer defaults are unacceptable to many investors. But blaming the lack of liquidity on the multicurrency system is being dishonest.
I can understand where the banks are coming from. The productive sector requires long-term loans to realise any meaningful return on investment.
Bankers are walking a tight rope. They cannot be guaranteed any payback of loans they may advance.
Many players, local and foreign, have invaded the domestic market. Any return on interest payments is nothing to be proud about.
Hence banks rely on charges to keep afloat. It is a very difficult and frustrating situation.
The ordinary people, including civil servants, have very little disposal income.
But be that as it may, this situation we are in now, with the multi-currency system, is better than the era of hyperinflation that we all experienced.