It’s the first Monday of 2022 and we saw quite a bit from the government and its agencies in 2021. I am sure we can all recall SI 127 of 2021 that was the latest attempt at price control even though most Zimbabwean businesses don’t have access to the Forex Auction. SI 89 banned the importation of second-hand cars over 10 years old. And who could forget the last salvo that was launched in the name of progress, e-passports…
All of these measures were walked back or in the case of SI 89, there was an extension that felt more like a last-ditch effort to recoup the duties from cars 10 years or older and give the books a nice look. So… in light of the New Year, how about offering some unsolicited advice to the various regulators who made the headlines last year.
Resolution #1: Consult to avoid embarrassment…
The panic that ensues after a “henceforth” or “With immediate effect” is not healthy for a government that is hoping to achieve middle-income status by 2030. Judging by the way these Statutory Instruments are then amended and panel beaten shows that they should take a leaf from conventional legislation and just give people a copy and let them debate it before it is made law.
By people, I mean everyone and not just having meretricious meetings with “Captains of Industry”. You’d honestly be surprised how smart the common man is especially when it comes to matter about money. SI 127 is a brilliant example of how they could have gotten an “aha moment” if they had explained it to a vendor and he/she replied, “we don’t get forex from your auction”.
On that note, how about we get this information in a manner that anyone can pick up and understand. By that, I mean in every language spoken in Zimbabwe as well as in mediums that accommodate persons with disabilities. The legal/technical speak only makes things more confusing if you aren’t familiar and does very little to build trust. I mean if you want the version with big words for whatever reason, go ahead. But at the very least everyone should know what is happening and not get second-hand information elsewhere.
Additionally, documents of national interest should be free to access not on Nick Mangwana’s Twitter feed or the Government Gazette. The government needs to zero-rate all its sites and use SMS, radio and television to ensure that the widest coverage for laws is attained.
If that all comes to pass, you’ll be surprised at how the level of discourse in this country is elevated because no one is left out of the loop. Those conversations will be vital to crafting legislation that won’t be rolled back or altered because public outrage demanded it.
Resolution #2: Crypto legislation, it’ll do more good than harm…
The government’s stance on Bitcoin and other alternative currencies deserves a spot on the Choosing Beggars SubReddit. We are in no position to overlook the opportunity that lies in cryptos because we have been an economic joke for the better part of two decades and we need to assess every method out there to ensure we get out of this hole.
Now, I am not denying the volatility of cryptos, not at all… They go up and down at alarming rates but this is something that’s in our wheelhouse with our off again, on again Zimbabwe Dollar. We have seen over the last year Nigeria launch a central bank digital currency (eNaira). For context, Nigeria, much like the RBZ, earlier in 2021 banned banks from doing business with crypto exchanges after the #EndSARS protests were getting donations through crypto. That about-face whatever the reasons might be should be a sign to the RBZ to treat every innovation as not being “off the table”.
Moreover, Africa’s crypto transactions hit a record high last year. According to a study by Chainalyis in June 2021 transactions were valued at US$105 billion which was a 1200% increase from the figure recorded over the same period in 2020.
The fear of blockchain technology the RBZ and Ministry of Finance exhibit is confusing because it could improve things like Tax collection. According to the Intra-American Centre of Tax Administration, blockchain tech could reduce VAT fraud
“There are proposals for other applications of blockchains in the tax field, such as the development of specific cryptocurrencies to reduce VAT fraud in intra-community transactions within the European Union. Blockchain could solve many of the system’s weaknesses by creating a digital invoice register, which would allow tax authorities across Europe to view and verify the taxes paid when a product changes hands”Intra-American Centre of Tax Administration
More importantly, the exploration of blockchain technology and crypto legislation could help stem the flow of scams that are ravaging Zimbabwe. CryptoShares and other such schemes have been preying on people who are looking for opportunity but don’t understand the mechanisms behind the technology to know that there are no massive returns overnight and success is in part about volumes, intuition and in some cases luck.
We shouldn’t let things like this pass us by while complaining about old systems and not looking toward what is currently possible now.
Resolution #3: two rates aren’t making anything right
The tug of war between the Auction Rate and the Parallel Market Rate has been something to behold. I am not an economist by any stretch of the imagination, but I can put myself in the shoes of a potential investor and the comical war of the rates doesn’t inspire confidence.
Which rate is the real one? Why change money through official channels when things are more lucrative on the streets? All of these questions and more are some that people who are looking to explore opportunities in Zimbabwe weigh.
Even diasporans are confused at how a currency trades different when it’s EcoCash, ZIPIT or cash… This makes us an unattractive destination to many companies and further compounds problems like the international payments restrictions we are under from companies like PayPal and the dearly departed Skrill.
Resolution #4 For the love of all that’s good, we need a startup act
A bespoke startup Act is long overdue… Businesses aren’t coming to life the way they used to in the 80s, 90s or even the early 2000s. Companies are now starting and aggressively seeking growth but all this isn’t helped by the fact that the operating environment doesn’t allow for that.
Startups are capped when it comes to investment opportunities because the culture of Zimbabwean investment is one that is still firmly entrenched in centuries-old industries. One of our contributors wrote a really good piece about the startup act which you can access with the link below:
Countries like Morocco, Kenya, Nigeria and others have made it so that startups can flourish. Nigeria in particular, because 3 out of the 7 companies that are unicorns (valued at US$1 billion) came from the western African Nation. Out of all 7, 5 are in Fintech which is an area Zimbabwe needs to more aggressively address than the RBZ’s Fintech Regulatory Sandbox…
Resolution #5 Online voter registration
The headline “Only 2000 people registered to vote in 2021” in all of its variations was deeply saddening. Why must the process of participating in a national election illicit so few people to, at the very least, put their names forward to partake in an election?
The Zimbabwe Electoral Commission needs to take a page from our neighbours down South. ZEC’s counterpart fervently went about opening an online voter registration platform because they realised that turnout was being affected by people having to go out of their way to do something that can be done on a computer or phone.
If we can open bank accounts, register for services, transact through our phones via the internet or USSD, why can’t we register to vote through the same devices. More so that we are seeing COVID-19 case numbers rising… It’s about time we have an online or a device based voter registration system be put in place.
If we can’t craft one in time for the 2023 elections then ZEC will be forgiven for copying the South African Electoral Commission’s notes.
Happy New Year to one and all
Hopefully, 2022 can begin with steps in the right direction… The things I have mentioned here are barely scratching the surface and I’d very much like to hear your unsolicited resolutions for our government.