This morning we were talking about the introduction of a USD card by ZUVA for buying petrol and diesel. They of course didn’t start it: Chicken Inn introduced “discounts” for purchases in USD. What’s interesting about these discounts is that they mirror the parallel exchange rate of RTGS to USD and they are close to the original Chicken Inn prices before prices took wings in Zimbabwe.
Again, Chicken Inn didn’t start it. It was started by Mthuli Ncube and John Mangudya when they announced the separation of accounts into FCA Nostro and FCA RTGS. Of course the FCA behind RTGS is them maintaining their delusion that what we have in our bank accounts (the old ones) is still USD when the USD was long looted by our rulers.
In that vein, Mthuli didn’t really start it: it was started when the government started inventing numbers and replacing our hard earned money with the make believe electronic money. It wasn’t even the bond note that got us here. Much more was printed through the RTGS system than the bond notes.
Anyway, it’s easy to get carried away. Here’s what Cimas says:
24 December 2018
The Society wishes to advise its valued customers that there are escalations on RTGS claims while USD claims costs remain static. This development has led to members incurring huge co-payments in RTGS terms while there are no or little co-payments in USD claims. The Society has engaged some service providers who advised that the distortions are a result of the need to raise foreign currency (which is not readily available) to procure medicines and medical consumables.
In an effort to ensure equity and in response to the recently announced monetary policy, we are introducing foreign currency denominated products to complement the existing RTGS products effective the 1st of January 2019.
The USD denominated packages will bridge the current gap and avail options to accommodate our diverse membership. The initiative is also based on the need to capacitate our healthcare service providers thereby enabling them to import the healthcare delivery inputs. Claims for members who will be registered onto these products will be reimbursed through the Nostro FCA accounts. Members who are currently registered on traditional packages are allowed to migrate to the foreign currency products without waiting periods.
Please note that the Society will continue to offer all the traditional packages that are denominated in both RTGS FCAs and Nostro FCAs.
Find attached the four package options for your consideration. For further information, please contact Sales & Marketing and Customer Services teams to discuss the detailed benefits at your convenience.
Managing Director – Medical Aid
Is the government being deliberate?
We are surely dollarising and I am beginning to wonder if this is not a deliberate move by the government. Instead of dollarising by decree they are leaving the market to do it by itself. Dollarisation is going to be painful no doubt.
If the government had the guts to just call it, we would experience acute and sharp pain and then it will be over. This gradual process will beat us down and weary us.
Whether or not the government is deliberately choosing to let the market correct itself (or rather correct the government overspending) we are in the thick of a dollarisation ten years after dollarising. Merry Christmas.
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Professor Mthuli Ncube is the Minister of Finance and Economic Development.He was the Chief Economist and Vice President of the African Development Bank ,financial, economics, investment, and public policy expert, entrepreneur and academic. Professor Ncube divides his time between the private sector in Switzerland and... Read More About Mthuli Ncube
John Panonetsa Mangudya is an economist and the current Reserve Bank of Zimbabwe governor. Mangudya, who sits on many local and international boards .He was made RBZ governor after the expiry of Gideon Gono's term in 2014. He had been CBZ Holdings Ltd Chief Executive... Read More About John Mangudya
Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were... Read More About Bond Notes