In April, we reported about Zimbabwe’s plan to introduce a barter system into paying tuition fees for school. It showed the far-reaching effects of Zimbabwe’s cash shortage, which has inspired a number of “weird” policies including a new plan to begin using livestock as bank collateral.
Years after a hyperinflation that made many poor millionaires, Zimbabwe’s economy continues to suffer. Currently, there is a distinct lack of investment in the country, rising unemployment, decline in the manufacturing industry and the cash shortages we have already touched on.
Last month, Zim’s government tabled the Moveable Property Security Interests Bill before parliament. The Bill would see Reserve Bank of Zimbabwe being compelled to create a collateral security register. A controversy was, however, stoked when bankers worried about the definition of moveable assets.
The finance minister, Patrick Chinamasa, clarified a that a bit by saying that moveable assets would “include any type such as machinery, motor vehicles, livestock, and accounts receivable.”
It may sound like a choice to use livestock as bank collateral can only be good for locals but skeptics of the bill remain. They call to mind the fact that local farmers who benefited from the land reform are still facing challenges in using their land as collateral because the title deeds remain with original owners most of whom are the white farmers who Mugabe stripped of ownership.
As expected, the government is championing the bill saying that it reflects prevailing economic realities in a predominantly informal economy. The barter system to pay tuition fees is actually a consequence of this bill. The minister of education, Lazarus Dokora, speaking in favor of the policy had urged parents who cannot afford to raise tuition to offer livestock as payment or do chores at their children’s schools.
The practicality of the bill is still hard to pin down. A Harare parent, Mr. Tawanda Tsomondo summarized the impracticality of arrangements with livestock smartly when he said; “We cannot run schools with goats.”
The larger question therefore becomes; can livestock help save Zimbabwe’s economy?