ICWT Newsletter


Who will tame the elephant in the room


By Tinashe Murapata

Inflation, Milton Friedman cautioned, “is always and everywhere a monetary phenomenon”. The two economists heading Zimbabwe’s central bank and treasury understand this all too well. In fact, the former Reserve Bank governor Gideon Gono startled the nation by claiming Zimbabwe could have fourteen million different governors and they would not be able to tame the elephant in the room.

The big elephant in the room is Government of Zimbabwe profligacy. This is governments insatiable quest to spend beyond its budget. It is reckless indiscipline. Take for example expenditure on agriculture inputs for pfumvudza to 3.5m households when Zimbabwe only has 3.8m households!

There is political desperation brought about by the governments political insecurity. It is no coincidence that since 1990, politically motivated printing has never stopped. It has gotten worse.

Last weekend we woke up to the news that Zimbabwe has officially entered hyperinflation. Steve Hanke has it at 1220% per annum. Governments own numbers are at 86%. As prices change thrice a day in the supermarkets it's easy to see the government’s lie.

The banks, in a bid to protect the domestic Nostro Accounts or the American dollars in the formal system have ring fenced real dollars from RTGS dollars. There is an impending threat that requires the financial system to be ever more diligent.

As of March 2023, Zimbabwe Nostro total deposits were US$2billion supported by US$1billion in actual physical cash and cash held in foreign banks offshore. The difference between total deposits and cash is credit deposits of US$1billion. That is money created by the banks. At 50% ratio this is a very healthy position. At least as of end March 2023.

Notable is the decline in cash from US$539million in March 2022 to US$457million in March 2023. However, offshore cash has increased by US$80million.

The Nostro balances in the overall banking system are safe. But the overall position may not be true for individual banks.
But, there is a real threat to the NOSTRO system from two principal sources and these are;

(a) Civil servants salaries &

(b) Barbarians at the gate

Civil servants US Dollar salary transfers from Treasury IF NOT backed by real US Dollars are a problem. The salary payments range from US$100million to $150million monthly. This mishap occurred before in 2019 and created a hole that was taken over as debt by RBZ. Therefore, the Zimbabwe government must support salary payments with real dollars.

The big worry is the Barbarians at the Gate. Whenever the official exchange rate moves the way it has done, the threat of shenanigans rises. It can happen either with ZWL(Zim$) or local nostro Treasury bills.

Back in 2019, IMF warned the Zimbabwean government and RBZ that Sakunda Treasury Bills of US$366million would crash the monetary system. The current turf wars between RBZ and Treasury speak to the inherent threat to the system. Can the Banks and RBZ stop the politicians in an election cycle from gate crashing?

What is the solution? The governing elite has an existential crisis and the country has been unable to provide them with a viable off-ramp the same way China provided Mao and the old guards an off-ramp. Zimbabwe requires a Lancaster house type settlement. Ian Smith and the white community had an existential political crisis and held on to the levers of power to secure themselves. The Lancaster house settlement was a viable off-ramp. As long as the political threats remain, real or imagined, then the printing will never end.

In Conversation with Rumbi Katedza


Film and Television Director Rumbi Katedza is changing the Zimbabwean film narrative locally and globally through her documentaries and films. She has worked with Oprah Winfrey and Prince Harry on an Apple TV Mental Health Documentary. The award winning director says the US$5 billion African film industry has potential to net US$20 billion if the right policies are put in place. Watch the Rumbi Katedza episode here..

Audience Responses

From the Rumbi Katedza episode, our community had this to say:

fola hafeez:
I learnt a lot from this conversation thanks Trevor. Our government needs to do more to tap into the film sector
Elizabeth Mutasa:
Sad to see many young people who are talented both in the film and music industries but do not get Government support …..furthermore our law makers hardly talk about these vital industries that could create the much needed employment tt to thousands of College or University graduates….wasted talent….Cry our beloved country 😢….so it’s not surprising there is no policy regarding the Film and music industries…
Mziwandile Ndlovu:
Inspirational. We don’t celebrate Rumbi enough.

Coming Next: In Conversation with Tafadzwa Mundicha


Don’t miss the next episode with Co-founder & Director of Solgas Energy Tafadzwa Mundicha In Conversation with Trevor.


Subscribe to our newsletter here.


in conversation with trevor Zimbabwean entrepreneur and newspaper publisher Trevor Ncube sits
down with various high-profile guests in a series of candid,
conversations that seeks to go beyond the headlines
and beyond the sensational.

Book of the Week

book cover

Directing: Film Techniques and Aesthetics by Michael Rabiger & Mich Hurbis-Cherrier

yours on Amazon

Recommended Reading:

We Need New Names

by NoViolet Bulawayo

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