Biti says Mnangagwa policies, a replica of Mugabe’s 37 year rule

Former Finance Minister Tendai Biti has castigated President Emmerson Mnangagwa’s decree that the multiple currency regime would exist until December 2025 saying that his policies were a replica of the late former Zimbabwean leader Robert Mugabe.

On Monday, Finance Minister Mthuli Ncube and Permanent Secretary George Guvamatanga announced measures recommended by the Reserve Bank of Zimbabwe (RBZ)’s Monetary Policy Committee (MPC) to stabilise the economy and the financial crisis.

The policies include but not limited to keeping the multiple currency regime for five years while making the US dollar a legal tender.

Biti who has been an advocate of dollarisation is of the view that the struggling Zimbabwean economy needed to not have several currencies.

He argued that the way Mnangagwa’s government handled the economy resembles Mugabe’s unsuccessful era.

“Through SI118A of 2022, Mr Mnangagwa has issued a Presidential Decree in terms of the Presidential Powers (Temporal Measures)Act Cap 10:20. Despite his short tenure Mr Mnangagwa s decrees are almost as equal to Mr Mugabe’s decrees over his 38 year tenure.

“The new Presidential Decree SI 118A /22 provides for the following 1) that the multiple currency regime will exist until Dec 2025 (2) that the authorities have power to freeze any account suspected of Forex abuse in terms of the Bank Use Promotion Act Cap Act …

“….(3)any foreign loan must be repaid in foreign currency (4) retailers shall not sell goods at exchange rate above 10% above prevailing interbank rate . (5)A fixed fine of ZW$ 20 million may be imposed on any offender,” Biti, who is also the opposition Citizens Coalition for Change (CCC) vice president, said.

The Harare East legislator also slammed Mnangagwa accusing him of unconstitutionally using his powers to amend the Exchange Control Act.

Mnangagwa on Tuesday promulgated Statutory Instrument 118A stipulating that if a bank loans out in forex, the payment must be in forex.

But Biti stated: “The Presidential Powers(Temporary Measures) Act which allows a President to bypass Parliament and make laws is patently unconstitutional. Particularly when those decrees override a specific Act of Parliament. Presidential decrees are an authoritarian abuse of citizens and Parliament.

“The re-legalization of the US$ is an embarrassing acknowledgment of the failure of 4 years of vigorous pursuit of a de- dollarization agenda that was never going to work. In a normal country Mthuli Ncube, who sought to build a career on de-dollarization should resign or be fired.

“There were never conducive conditions for de-dollarization and naturally the experiment failed. Despite heavy handedness and the legal force of SI 33 -2019 , the economy self dollarized with 70% of all current transactions conducted in the US$. In this respect SI118A is old news.

“The measure to obligate repayment of loans in currency of disbursements could only make sense if Banks were also obliged to honor deposits in currency of deposit. Billions of dollars were lost when citizens who had made US$ deposits were now forcibly made to withdraw RTGS$

“The power to freeze accounts and the threatened imposition of punitive fines of $20 m is not only excessive but irrational and patently unlawful . At the end of the day it is a lot of hot air.The truth is it is the cartels closely associated with the regime who are abusing the system.”

He postulated that “cartels have been the main beneficiaries of the Dutch Auction. They have borrowed billions from Banks which they have used to purchase foreign currency from the auction and from the black market. The regime knows this. It can’t take action let alone expose its crony benefactors.”

“Truth is economies are not run on coercion and threats. They are not run on ill thought kick and hope praxis.They are not run on experiments that reflect deep contempt for any theory or philosophy. They are run on clarity, consistency and clear strategic and theoretical trajectory

Truth is economies function on the basis of confidence and the social contract .Economies function on legitimacy. Thanks to incompetence, inconsistency and total lack of confidence the Zimbabwe economy is in tatters. The country needs a major paradigm. A new beginning.”

This comes at a time when the country is facing a dire economic and financial crisis. According to the Business Standard, Zimbabwe’s annual inflation rate jumped to 192% in June, the highest level in over a year, as food costs more than tripled.