‘Mnangagwa giving masterclass in economic stupidity and corruption’
Steve Hanke, a Professor of Applied Economics at The Johns Hopkins University in Baltimore has taken a swipe at Zimbabwean President Emmerson Mnangagwa accusing him of “giving a masterclass in economic stupidity and corruption.”
Hanke argues that, under the Zanu-PF regime led by Mnangagwa, the Zimbabwean dollar lost 93% of its value against the USD since January. The prominent economist has been consistent is denouncing how the government of Zimbabwe manages the economy.
He has also been calling for the disbandment of the Reserve Bank of Zimbabwe (RBZ) and the creation of a currency board to save the ZWL currency whose value is deteriorating every day.
In his latest criticism of the Zimbabwean regime, Hanke said:
“President Mnangagwa is giving a masterclass in economic stupidity and corruption. Under Mnangagwa’s regime, the ZWL has lost a stunning 93% of its value against the USD since January. 2022. Talk about backward progress. MNANGAGWA=WRONG-WAY CORRIGAN,” he said.
Zimbabwe is in a dire economic situation coupled by a financial crisis and skyrocketing inflation. The local dollar is falling rapidly against the US dollar trading at more than US$1: ZWL3500 on the black market.
Prices of basic commodities and services are rising in both ZWL and USD. Both public and private workers are rejecting salaries in the local currency.
On Monday, Finance Minister Mthuli Ncube announced a number of controversial policies to try and save the economy.
These include but not limited to the fact that all government agencies, including parastatals, will now collect fees in local currency, government rather than the Reserve Bank will buy the 25 percent of foreign currency exporters are required to surrender, the auctions will be limited to US$5 million a week, and all retained export earnings unspent after 90 days will be liquidated in the interbank market.
Commenting on Ncube’s latest policies, former Finance Minister Tendai Biti said the move reflected a fall-out between RBZ and the Ministry of Finance.
“Mr Mthuli’s new measures are the latest expression of a desperate regime arrested by a panic attack, schizophrenia and cluelessness. In the main they are illegal measures which require Parliament Not only that they reflect a cataclysmic fall-out between the Central Bank and Treasury,” the Harare East legislator said.
“We have consistently argued that de-dollarization has failed and therefore the government needs to dollarise while floating the ZWL. Anything short of this will not work. We have also argued that the auction system should be scrapped and therefore reducing the auction to US$5 million will not work.
“We have also argued that the Central Bank has gone rogue and needs to be replaced by a currency board.The new measures will not stop RBZ from conducting quasi fiscal activities or its illicit gold dealings.Deeper reform is required.
“We have also made it clear that the Treasury has no powers of assuming any debt from anyone, only Parliament has this power.Imposing on the taxpayer RBZ debt is immoral and illegal. The RBZ over the years has been at the center of major extractive behavior including borrowings and quasi fiscal activities.”
Biti added: “Assuming RBZ debt without exposing it to an audit is therefore a grand fraud on the people of Zimbabwe. Truth is an economy can’t be run be sporadic , adhocratic statements made outside Parliament and oblivious to previous policy pronouncements.The market requires rules and certainty
“We say to them again, dollarize and float Zimbabwean dollar, scrap export surrender requirements and auction system, pay workers and pensions in US$, pursue fiscal consolidation, Deal with corruption, deal with infrastructure and decarbonize. Most importantly, have free and fair elections.”
