Open letter to RBZ governor . . .unpacking the gold coins from the land of Ophir

By Bart Mukucha | Oct. 2, 2022

John Mangudya

My beloved brother from another mother, I hope I find you well and safe in the ivory tower.

There was ululation, jubilation and joyful gyration of all types when, on the 24th of June 2022, you announced you would be issuing gold coins to offer the general public a safe store of value.

Many readers of this column from around the world have since requested me to congratulate you on their behalf for finally taking heed of the Turkish proverb I repeatedly propounded to you: No matter how far you have gone down the wrong road, turn back.

I do not hold any grudges against you for naming the coins Mosiyatunya instead of Munhumutapa Gold Series as I recommended to you way back in the year 2020 when I initially mooted the idea of a gold standard with special adaptations for the local situation and the broader modern environment.

Although I kept mentioning “special adaptations,” I did not actually mention them in detail to you as I envisaged them for the local situation.

So it has been very interesting to me to observe your attempts to utilise the coins for the national good.

A parliamentary caucus has already accosted you demanding to know how the coins would be of benefit to the man in the street.

Others have made remarks to the effect that the whole idea of the coins, is in fact, a damp squib.

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There is a video trending on social media featuring the current local $100 note. The note bears the image of the legendary national heroine Nyakasikana the spirit medium of Nehanda.

The video would be most hilarious, if it wasn’t so tragic.

In the video, the image of Nyakasikana comes to life and starts singing a lamentation, or is it a dirge?

The lyrics are addressed to His Excellency the President of Zimbabwe.

She is admonishing and reprimanding him asking if heroes and heroines like her died only to see from their shallow graves a worthless currency that cannot buy a loaf of bread.

This video correctly depicts the mood and attitude of Zimbabweans and the world regarding the local currency. And so in spite of the introduction of the gold coins, there is an inexorable groundswell for re-dollarisation of the economy because all hope in the local currency is lost. Merely introducing the gold coins without the “special adaptations” will just be another wild goose chase like the one you did at the Casino Royale in the name of price discovery.

However, I would want to encourage you by assuring you that you are now on the right road.

But you might be suffering something of a hangover due to your very long stay on the wrong tortuous road where you were chasing the very swift wild goose called “price discovery”.

Everybody knows how you openly confessed to seeing demons while on this wrong road.

You may rest assured that on this new and correct road you are well on the way to success if you apply the special adaptations that I recommended to you from the start.

Your efforts to sell the coins in both local currency and foreign currency through commercial banks are indeed laudable and are generally in the right direction.

However, these efforts are not aggressive enough for the dire situation our currency is in. It would indeed be fair comment to describe your efforts so far as shy, apologetic, docile, feeble and without passion at a time when you have the opportunity to roar unfettered like a young manned lion.

Your present strategy is analogous to one throwing a juicy bone to a hungry pack of dogs and watching with excitement and expectation of the unknown to see which dog will claim the bone.

You must realise at this early stage that the man in the street cannot afford to buy a gold coin even if you offered it to him at half the price in local currency. Yet he is fully entitled to benefit meaningfully from the presence of the coins in his domain.

Knowing how resourceful you are, I will not give you the details of the special adaptations on a silver platter unless you invite me for a cup of tea in the ivory tower.

In the meantime, I will give you useful hints of the results you can aim to achieve with the gold coins if you adopt the special adaptations.

Arrest the relentless fall of the local currency and see it strengthening.
Avoid a head-on collision between the US$ and the Z$ which you were overseeing every week at the Casino Royale.
Sterilise the funds used for speculative attacks against the local unit.
Create demand for the local currency amongst international and local investors.
Eliminate the exchange rate of the local currency on itself (i.e. different rates for hard cash, bank transfers, mobile transfers etc)
Take control of the exchange rate of the local unit and fix a level for it.
Increase the value of the current stock of money you have already issued.
Reduce the need to print more money.
Reduce the price of goods and services in local currency.
Bring back national pride in a strong and stable currency with regional and international respect.

Since you have finally got the tool to achieve all of the above, I want to tell you that it is now much easier for you to succeed than to fail. You now certainly have the opportunity to achieve what no other central bank governor has achieved on the African continent. I will even go on to say you are now well on your way not only on the right road, but in building roads to the success of your countrymen.

In parting, I will propound another proverb to you, a Chinese one this time: Wealth is near if roads are built.

Bart Mukucha

Feedback: bart.star-james@gmail.com