FORMER Finance minister and Harare East legislator Tendai Biti says Zimbabwe needs to reintroduce the multi-currency regime, seek debt cancellation and liberalise the fuel industry, among other interventions, to get the economy ticking again.
In an interview, Biti also said a political solution is key to addressing Zimbabwe’s economic crisis and resolving the crisis of legitimacy emanating from last year’s general elections.
President Emmerson Mnangagwa beat MDC Alliance president Nelson Chamisa by a wafer thin margin although the MDC insists the elections were rigged.
“We can easily do that (solve the legitimacy crisis) through dialogue between Nelson Chamisa and Mr Mnangagwa,” Biti said. “We need to establish a national transition mechanism as a matter of urgency.”
Biti also said government should repeal Statutory Instrument 142/19 with immediate effect, and the government should go back to the regime of multiple currency even with the local currency working as a medium of exchange and the exchange rate will find equilibrium.
“We need to restore the multiple currency in particular the US dollar and the rand as the legitimate legal tender in Zimbabwe,” he said. The government, Biti said, should amend the Reserve Bank of Zimbabwe Act to stop the RBZ from printing money as the solution to cash crisis.
“We need to protect the economy against the excesses and the rock behaviour of the central bank” Biti said. “We need to ban the export surrender requirements as a matter of urgency to avoid government taking people’s money in the name of export surrender requirements.
“We also need to liberalise the fuel market so that anyone with free funds should be able to import fuel to ensure availability of fuel at a cheap and affordable price.”
Biti said the government should ring-fence pensions and savings in US dollar terms to avoid devaluation of pensions and savings. The Zimbabwe Electricity Supply Authority, he said, should be allowed to levy its charges in US dollars. This will enable the parastatal to import the required 400 megawatts of electricity.
Biti believes the government should get rid of command agriculture and introduce incentives to the farming sector.
“Every farmer must have a title deed, the banking sector must mobilise resources to finance agriculture,” Biti said. The MDC vice-president said government should also weed out “the more than 400 thousand ghost workers” from the civil service to reduce the government wage bill.
On the 2% tax on electronic transfers, Biti said it must be lifted with immediate effect while reducing corporate tax. He said government should introduce flat tax across the board of 15% provided the country adopts the use of multi-currency as legitimate legal tender in Zimbabwe.
“We have to invest in our infrastructure and this needs about US$20 billion, but to do this we should first solve the current Zimbabwe debt structure,” Biti said.
“We have to negotiate with the World Bank with the international community and this requires a government that is respected by the international community but Zanu is not respected.”
Biti said the government should find ways to negotiate with the US and the Paris Club of creditors before seeking debt cancellation on the quid pro quo for sound economic behaviour. “Zimbabwe’s debt should be cancelled,” he said.
— Zimbabwe Independent