The Minister of Finance and Economic Development, Professor Mthuli Ncube yesterday announced new measures to address the country’s worsening economic woes and stabilize the local currency that has continued to plummet against major currencies particularly the United States Dollar.
He announced the measures yesterday in Harare, pledging the government’s commitment to tackle inflation and the skyrocketing prices of basic commodities.
Addressing journalists, the treasury chief said the multi-currency system will continue to subsist for the foreseeable future as part of government’s 5yr NDS1 economic blueprint.
“The government has slated its intentions of maintaining a multi currency system based on the dual use of the US dollar and the Zimbabwean dollar.
“However, the market lakes confidence in multi currency systems, and this is causing problems. “I want to assure you that this multi currency system will stay in the foreseeable future,” said Ncube.
Meanwhile, the Reserve Bank of Zimbabwe (RBZ) yesterday also announced that it is set to introduce gold coins.
In a statement, Governor John Mangudya said the gold coins would be introduced as part of measures to ensure investors and the general public have alternative means to preserve value.
However, responding to these measures in a Twitter thread, Harare East MP, Tendai Biti, who was the Minister of Finance and Economic Development during the GNU era blasted the measures, adding that the RBZ had “outlived its usefulness and, therefore, should be abolished”.
“When one has nothing to say one must shut up. Today’s(yesterday) presser was a tragic expression of the humongous levels of deceit, dishonesty, incompetence and hypocrisy of this regime. It is not news that the multi-currency system will continue. The fact is the economy self-dollarized a long time ago.
“The regime owes Zimbabweans an apology for the 2019 fiction contained in SI33 of 2019 and the botched de-dollarization process. The regime must genuinely compensate those who lost value in 2019, particularly pensioners.
“Today’s (yesterday) announcement is an acknowledgement of failure and will not address hyperinflation, food shortages and poverty levels affecting our people. It will not address the doctors’ and nurses’ strikes or low public wages eroded by inflation. It does not address skewered fundamentals and the disequilibrium in the economy.
“The Willing Buyer Willing (WBWS)Seller principle will not work for as long as the auction system exists. The auction system is a source of arbitrage and must be abolished forthwith. Further RBZ interference in the WBWS makes it dysfunctional. It is not a competent source of price discovery
“The WBWS exchange like the Auction rate represents yet another rigged rate hence the huge difference between the same and the rate on 4th Street. The RBZ should have no role in the determination of the exchange rate. Truth is the Central Bank long outlived its usefulness and should be abolished.
“The Solution is simple. Use the USD$ as a transitional mechanism. Float Zim$. Eliminate export surrender requirements. Pay civil servants US$D. Deal with debt burden, deal with corruption. Pursue fiscal consolidation. Fund the social sector and attend to Gross Capital Formation,” said Biti
The new measures come at a time when Zimbabwe’s economic woes are worsening, with inflation reaching a new month on month high of 191% in June, from a May figure of 161% and local currency continues to lose value against major currencies. The local unit is currently trading at USD$1-$700ZWL on the parallel market, eroding the value of wages with most workers being paid in ZWL.
The economic woes have prompted civil servants to demand USD$ salaries in order to cope.