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Zanu PF plunges Zimbabwe into economic crisis: Biti

HARARE – Former Minister of Finance in the coalition government Tendai Biti on Tuesday said the sham July 31 election had plunged Zimbabwe into a crisis of legitimacy, leadership, governance and a depressing economic crisis. 

Tendai Biti
Tendai Biti

Addressing a press conference in the capital, the MDC-T Secretary General and shadow Minister of Finance said:

“It is far too easy to rig an election but the economy is a totally different ball game. What is happening on the ground is that they (Zanu PF) are helpless and cannot run an economy. Sadly, we are on auto cruise to 2008,” Biti said.

Biti said the past few months have seen a significant fade in business confidence, decline in industrial capacity utilisation, and collapse of economic recovery which had begun in 2009 under the coalition government.

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With over 300 workers being retrenched every week alone, Biti said this was a sign of the massive contraction of the economy and its attendant decline. Retrenchments, company closures and capital flight have been a consistent feature of the post-election period he noted.

According to Biti, the post July 31 crisis was manifested by the following:

  • High level of unemployment pegged above 84 percent
  • Increased shortage of water and power
  • Inability to pay and increase civil servants salaries
  • Absence of agriculture support for the 2013/14 cropping season
  • Rising domestic debt and sovereign debt
  • De-industrialization and plummeting capacity utilization
  • Collapsing social services such as health and education
  • Lack of foreign direct investment
  • Capital flight
  • Lack of domestic savings and systemic banking sector vulnerabilities 

Speaking on the troubled banking sector and the liquidity crunch being experienced in the country, Biti said the challenge that the sector faces is symptomatic to what is happening in the whole economy.

The long winding queues at banking halls and the limiting of individual withdrawals to only $30 to $50 per day was less a monetary issue than it was a fiscal issue.

“There is no production; there are no meaningful exports, so naturally there is no liquidity and wealth being created. The liquidity crisis is so bad that echoes of 2008 are beckoning,” he said.

He said banks that had been mostly affected were the small banks, especially the Allied Bank which is owned by a Zanu PF minister, Obert Mpofu.

Biti expressed strong fears that Zanu PF’s failure to turn around the country’s economy would force Zanu PF to bring back the Zimbabwe dollar into circulation.

“As part of Zanu PF plan of rigging the economy, they will bring back the Zimbabwe dollar. That is the only operational avenue that remains for Zanu PF. They do not have a stern action on indigenisation or re-engaging the international community,” Biti said.

He criticized high government expenditure which is not in tandem with generated revenue saying “We are hunting and catching a mouse, but feasting as if we have killed an elephant. It simply does not work. You must eat what you kill. We are dealing with a government that has no idea that wealth is created by producing. That to us in the MDC is totally unacceptable.”

“Zanu PF’s assumption is that money grows on trees and this has led to the destruction of a cash regime that had been created in the inclusive government over the past five years. Zanu PF has shown that it likes eating but not producing,” Biti said.

Biti condemned the failure by the Zanu PF government to pay civil servants their December salaries and annual bonuses on time.

“The 13th cheque represents the only saving on the part of the worker for the whole year. If you fail to pay it is criminal and as a party, we strongly condemn this. Paying bonus after the Christmas holidays dampens the mood on the workforce and it is criminal and unacceptable.”

On the 2014 National Budget to be presented on Thursday by Patrick Chinamasa, Biti said given the attendant economic and political crisis engulfing Zimbabwe, it will be very difficult, if not impossible, to come up with a realistic national budget when the country is not creating any wealth or producing.

“The national budget to be presented on Thursday will be a Mickey Mouse budget as they are no revenues to back it up. Part of the reason is that we have a crisis of leadership. We have clueless people in Zanu PF without a vision.”

Biti said it was apparent that at the epicenter of the crisis bedeviling Zimbabwe was a chronic legitimacy crisis whose only solution lies in ensuring a free, fair, credible and legitimate election. The economic crisis is symptomatic of the political crisis in the country.

“We have an illegitimate regime in power. We are heading for a crisis. We had a stolen election and issues that were raised in the AU report on Zimbabwe’s 31 July elections on security sector reforms, the voters’ roll among other issues need to be attended to before such an election. We need political hygiene. We need to re-engage the international community. No one will invest in a country with an illegitimate government,” Biti argued.