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The Movement Democratic Change Alliance through its Vice President Tendai Biti has condemned the government’s policies supposedly meant to revive the economy saying instead they have driven the country into economic recession.
In October2018, the Government through the ministry of Finance and Economic Development launched a transitional stabilisation programme in a bid to set the economy on a recovery path after years of stagnation.
“The Transitional Stabilization Programme seeks to operationalise Vision2030. The vision will see Zimbabwe becoming a middle-income country with a per capita income of US$3500 per person,” Finance and Economic Development Minister Mthuli Ncube said then.
The programme had an expiry tenure of two years (October 2018 to December 2020).
As its duration comes to an end, recently, President Emmerson Mnangagwa unveiled the second economic blueprint of his tenure as he continues on his quest to turnaround Zimbabwe’s economy under the broad banner of Vision 2030.
The National Development Strategy 1 (NDS1) runs from 2021 to 2025 and succeeds the Transitional Stabilisation Programme that guided economic policy from 2018 to 2020 with a view to taming inflation, reducing government expenditure and ushering in currency stability.
However, these two economic plans have failed to address the real challenges as the cost of living continues to rise – Poverty Datum Line now stands at ZWL$17 200.
In response to these economic blueprints, the biggest opposition party in the country, MDC Alliance said instead of improving the current economic status the policies have put the economy “in a terrible shape” and rendering the local currency worthless.
Addressing journalists during the party’s State of the Economy speech, MDC Alliance Vice President who is also a former Finance Minister Tendai Biti said, “The Zimbabwean economy is in an unprecedented tailspin and is suffering from massive headwinds across all sectors, whereby in 2019 the economy shrunk by a staggering 12, 5%. What it essentially means is that we are back to depression economics,” Biti said.
“This is in sharp contrast to what government claims when they say that the economy is on the mend, that it will soon reap benefits for the people, which will subsequently lead to a middle-income economy by 2030.”
He also added that practically to all intents and purposes from 2016 onwards, the economy has been recording a sub-zero growth rate. Contrary to the estimations by Ncube in his 2021 budget strategy paper, a below zero growth rate is invertible.
Biti also argued that sanctions were affecting the economy, adding that the ruling party was just using them as a scapegoat for Ncube and Mnangagwa’s failures.
“The factors are primarily man made; the factors are primarily as a result of incompetence and cluelessness by government. We are returning to depression economics, because the Zimbabwean economy is very cyclical, it loves these booms and slumps, booms and slumps,” he said.
In his presentation he also disputed the credibility of the foreign currency auction system used by the Reserve Bank of Zimbabwe (RBZ) to determine the value of the Zimbabwe Dollar (ZWL) describing the process as “rigged,”
“Only the Reserve Bank of Zimbabwe has been supplying foreign currency. So, when you have got one supplier you cannot call that an auction. It’s a fixed exchange rate regime because he who controls supply lines also controls the value of the product and you will see that the price of the foreign currency has remained constantly at 80,” said Biti.
Biti’s remarks come at a time industry captains have also been calling on the independence of the auction system from the RBZ urging local banks to administer the process and make it inclusive of market forces.
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