Former Deputy Prime Minister Arthur Mutambara has trashed the Reserve Bank of Zimbabwe’s (RBZ) Mosi-oa-Tunya gold coins initiative, supposedly meant to ease inflation, as nothing other than a “shameful opportunity for the elite to loot.”
The RBZ introduced gold coins which economist Prosper Chitambara says are a government’s attempt at moderating the very high demand for the United States dollar (USD).
Posting on Twitter, Mutambara said:
Gold Coin: A Self-Enrichment Scheme for the Elites
Take your USD to the parallel market and get RTGS at, say, 1 USD to 950. Buy gold coins in RTGS at 1 USD to 441 (gold coin exchange rate) and make a profit of more than 100%.
The Gold Coin arbitrage. This is common sense. Gold Coin & the Elites. It gets worse!
For the elites; you take your RTGS to the RBZ and buy USD at the auction rate, say 320. You take this ill-gotten USD to the parallel market and buy RTGS at 950.
That is a profit of 200% Then go and buy your gold coins at 100% profit. From 10K USD to 60K USD (With no Production).
500% Profit for the Elites. Take 10k USD to the parallel market and buy RTGS at 950. Go to the RBZ & buy USD at 320 (auction rate). Go back to the parallel market & buy RTGS at 950.
Buy gold coins & pay in RTGS. It is shameful.
The central bank chief, Dr John Panonetsa Mangudya Monday launched 2 000 Mosi-oa-Tunya gold coins with a value of US$1 824 each, to provide “an alternative store of value.”
The figure is equivalent to ZW$805 745.35 for each.
Mutambara was Zimbabwe’s Deputy Prime Minister during the Government of National Unity (GNU), between 2009 and 2013 when the country realised considerable economic development.
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Reading the writing of prof Mutambara, one is left with no choice but to think that politics can blind straight thinking depending on circumstances.
1. If the rich can arbitrage on the gold coins, including in any other arbitrage opportunities, why can the poor not do the same?
2. The rich can start at their level, the poor also start at their level and the result is the same = 200% profit that the rich are getting.
3. So, where is the issue if one may ask?
Trying to see the issue, I find non?, trying to find the politics, it seems abundantly partisan.
So, who are going to be objective thought leaders in our societies if professors trash seemingly valuable wealth preservative schemes coming earlier than their preferred political parties coming into power?
It’s a reputational damage to the professor. Relying on professorial views becomes tainted with bad politics.
I opine that gold coins are good. Some people will be surprised when those they perceived to be poor become the top gold coin owners.