FORMER Finance minister Tendai Biti says the continuous shifting of policy on the use of United States dollars has compromised the standard of living of ordinary Zimbabweans and is symbolic of a system that has failed.
This comes after Civil servants salaries were adjusted by 50% with immediate effect. In addition they were awarded, a non-taxable, Covid-19 allowance of US$75 per month whilst pensioners will get US$30 per month.
Finance and Economic Development Minister Mthuli Ncube has said the measures he has introduced thus far are aimed at making the domestic currency stable.
Speaking in the National Assembly on Thursday, Biti said citizens’ ability to plan had become a pipe dream.
“Yesterday, the Minister of Finance effectively dedollarised by the introduction of a US$75 allowance to civil servants and US$30 to war veterans,” he said.
“It is our contention Mr. Speaker that the Minister of Finance owes Zimbabweans an apology that he should not introduce dollarisation through the back door; that he should repeal Statutory Instrument 33 and Statutory Instrument 142 and the Finance Act. Mr. Speaker Sir, the Minister of Finance has failed in absolute terms and must resign.”
Biti said a history of poor policy coordination, lack of policy clarity and policy inconsistency had fuelled currency instability and left Zimbabweans poorer. However, there have been no lessons learnt.
“We are concerned particularly about the constant changes to our Monetary Policy. In 2009, we introduced the basket of multiple currencies. The basket of multiple currencies lasted until 2016, when in November 2016, the Bond Note was introduced through amendments that were made to the Reserve Bank Act,” Biti said
“In 2017, Mr. Speaker Sir, the Reserve Bank of Zimbabwe and the Ministry of Finance spent the bulk of the year convincing Zimbabweans that the Bond Note was on par with the US dollar. They ran an expensive campaign called Operation gedye gedye, persuading the people of Zimbabwe to accept that the bond note was equal to the US dollar.”
“We were shocked Mr. Speaker Sir when on the 1st of October 2018 banks were suddenly advised by the Reserve Bank in an exchange control directive that they had to separate people’s accounts into nostro FCAs and nostro RTGS,” he added.
“We were further shocked when on the 20th of February 2019, Statutory Instrument 33 of 2019 was introduced which said we now have a new currency called the RTGS, which initially was at 1:1 then 1:2.5 and then was floated.“
Biti said in June of 2019,Zimbabwe dedollarised and that the Zimbabwean dollar had been restored as the sole currency in this country despite widespread concerns that it would be futile to tinker with the currency issue before addressing fundamental economic issues.
“Mr. Speaker Sir, some people protested and made the point that the country was not ready to introduce its own currency. We made the point that conditions did not exist for the introduction of our own currency. We were further confused yesterday when the Minister of Finance effectively dedollarised by the introduction of a US$75 allowance to civil servants and US$30 to war veterans,” Biti said.
Authorities insist Zimbabwe’s domestic currency is here to stay and they are focused on making it stable so as to encourage competitiveness.
The Zimbabwe dollar is pegged at 25:1 against the greenback but on the parallel market, it has depreciated to 80:1.
The parallel market rate used by the private sector to access foreign currency and for modelling prices, has eroded wages.