EDITOR — In 2001, the infamous Zimbabwe Democracy and Economic Recovery Act (ZDERA) was imposed on Zimbabwe by the US Congress, and the inflation rate rose from 80-350 percent between December 2001 and November 2003 when Executive Order sanctions were imposed on 80 investors, companies, politicians and individuals.

From 2003-2006, after imposition of the first Executive Order Sanctions (#EO13288) by the US President, inflation rose marginally for a short time to the beginning of 2005 and then went down from 350-120 percent.

Then, from November 2005, another 80 parastatals, companies, Government officials and investors were added to Executive Order EO13391, and inflation rose to over 9 000 percent in three years.

From 2001 to 2007, the RBZ increased money supply by only 100 percent or 13 percent compounded per annum (less than the US quantitative easing over the same period) while inflation was over an average of 1 000 percent per year.

The mass printing of money only began in earnest after the US President added the Government of Zimbabwe, all municipalities, all parastatals; Government companies like the IndustriaI Development Corporation (IDC), Ziscosteel, Willowvale Mazda Motor Industries (WMMI); Government banks like RBZ, ZB Bank, Intermarket, Scotfin; private companies doing business with the Government; and 144 other listed major investors like John Bredenkamp, Billy Rautenbach and Nicholas van Hoogstraten, among other associated companies and politicians to the Executive Order EO13469 in July 2008.

So, it would seem that Zimbabwe’s inflation started way before the RBZ began printing money (in July, 2008), and it turned into stagflation and the worst inflation in the world before Government printing presses began to print money to buy US dollars off the black market to keep the nation’s critical functions (buying fuel, medicines, fertilisers, seeds, reagents and vehicles) going.

We have seen that even though ZDERA existed between 2001 and 2005, inflation actually fell by over 50 percent under ZDERA and the first Executive Order sanctions, until the second set of Executive Order sanctions (EO13391) came in October 2005 and devastated the economy.

The country’s inflation would surpass 9 000 percent in January 2008, to over one billion percent between July 2008 and February 2009 when the Government of National Unity (GNU) was signed. This followed the introduction of  Executive Order EO13469 upon Government, its companies, banks, institutions and private businesses that do business with the Government. Basically, these became blanket sanctions upon the whole nation.

So now that these notorious Executive Order sanctions that broke the Zimbabwean economy have been removed by the American President, in an environment where the US is shifting its policy on Zimbabwe from aggression to mending bridges, should inflation be rising under ZDERA and individual Magnitsky Sanctions upon 11 individuals? 

According to history, between 2001-2005 when we were under ZDERA and Executive Order sanctions on 80 entities and individuals, the numbers say no. Moreover, as a nation, we have developed measures to mitigate sanctions better than before, but it is the use of the world’s reserve currency as our local currency, externalisation of that currency, the lack of savings in our banks, money trading, smuggling of precious resources and taking advantage of the arbitrage created by the illegal sanctions, that has become a scourge upon our currency. 

We need a change of mindset in to build our beautiful Zimbabwe.

Rutendo Matinyarare, via email.