Zanu-PF plunges Zimbabwe into an economic crisis – Tendai Biti

via Bulawayo24 NEWS | ‘Zanu-PF plunges Zimbabwe into an economic crisis,’ says Biti 17 December 2013

Tendai Biti, the MDC-T Secretary General and the party’s Shadow Minister of Finance today said the July 31 sham election has plunged Zimbabwe into a crisis of legitimacy, leadership, governance and a depressing economic crisis.

He said this while addressing a press conference on the state of the economy at the party’s headquarters in Harare.

“It is five months since the July 31 sham election and it is evident the Zimbabwe is a crossroads confronted with a crisis in the economy, crisis of leadership, crisis of governance and crisis of legitimacy. It is far too easy to rig an election but the economy is a totally different ball game. What is happening on the ground is that they (Zanu-PF) are helpless and cannot run an economy. Sadly, we are on auto cruise to 2008,” Biti said.

He said the past few months have seen a significant fade of business confidence, decline in industrial capacity utilisation, and collapse of economic recovery which had begun in 2009 adding that with over 300 workers are being retrenched every week alone, a sign of the massive contraction of the economy and its attendant decline.

Retrenchments, company closures and capital flight have been a consistent feature of the post-election period.

“The post July 31 crisis is manifested by high level of unemployment pegged above 84 percent, increased shortage of water and power; inability to pay and increase civil servants salaries; absence of agriculture support for the 2013/14 cropping season; rising domestic debt and sovereign debt; de-industrialization and plummeting capacity utilisation; collapsing social services such as health and education; lack of foreign direct investment; capital flight; lack of domestic savings and systemic banking sector vulnerabilities,” he said.

Speaking on the troubled banking sector and the liquidity crunch being experienced in the country, Biti said the challenge that the sector faces is symptomatic to what is happening in the whole economy.

“The banking sector is facing an acute liquidity crunch which has seen winding queues at banking halls and the limiting of individual withdrawal to only $30 to $50 per day. But the bottom line is the liquidity challenge is less a monetary issue than it is a fiscal issue. There is no production; there are no meaningful exports, so naturally there is no liquidity and wealth being created. The liquidity crisis is so bad that echoes of 2008 are beckoning.”

He said banks that had been mostly affected were the small banks, especially the Allied Bank which is owned by a Zanu-PF minister, Obert Mpofu.

“Obert Mpofu’s Allied Bank is under-capitalised. They do not have a business to do with banking or any other business,” Biti said.

His strong fears are that with its failure to turn around the country’s economy, Zanu-PF will bring back the Zimbabwe dollar into circulation.

“As part of Zanu-PF plan of rigging the economy, they will bring back the Zimbabwe dollar. That is the only operational avenue that remains for Zanu-PF. They do not have a stern action on indigenisation or re-engaging the international community.

“But the Zimbabwe dollar will not work in this economy. However, the Zimbabwe dollar will be forced on people like civil servants and the parastatals,” Biti said.

Biti also bemoaned the high government expenditure which is not in tandem with generated revenue. “We are hunting and catching a mouse, but feasting as if we have killed an elephant. It simply does not work — you must eat what you kill. We are dealing with a government that has no idea that wealth is created by producing. That to us in the MDC is totally unacceptable.”

“Zanu-PF’s assumption is that money grows on trees and this has led to the destruction of a cash regime that had been created in the inclusive government over the past five years. Zanu-PF has shown that it likes eating but not producing,” he said.

Biti condemned the failure by the Zanu-PF government to pay civil servants their December salaries and annual bonuses on time.

“The 13th cheque represents the only saving on the part of the worker for the whole year. If you fail to pay it is criminal and as a party, we strongly condemn this. Paying bonus after the Christmas holidays dampens the mood on the workforce and it is criminal and unacceptable.

He dismissed Zanu-PF’s Zim-Asset as a “cut and paste” policy document that is impossible to implement.

“With Zim-Asset, I don’t think that Zanu-PF has the capacity to do anything that will help the people and revive the economy,” Biti said.

He said the consequences of Zanu-PF’s lack of vision had resulted in the collapse of social services especially in health and education where in the Midlands province, only 20 percent of children managed to sit for their Grade 7 examinations.

On the 2014 National Budget to be presented on Thursday by Patrick Chinamasa, Biti said given the attendant economic and political crisis engulfing Zimbabwe, it will be very difficult, if not impossible, to come up with a realistic national budget when the country is not creating any wealth or producing.

“The national budget to be presented on Thursday will be a Mickey Mouse budget as they are no revenues to back it up. Part of the reason is that we have a crisis of leadership. We have clueless people in Zanu-PF without a vision,” Biti who was accompanied by the MDC Shadow Minister for Communications said.

He said it was apparent that at the epicenter of the crisis bedeviling Zimbabwe was a chronic legitimacy crisis whose only solution lies in ensuring a free, fair, credible and legitimate election. The economic crisis is symptomatic to the political crisis in the country.

“We have an illegitimate regime in power. We are heading for a crisis. We had a stolen election and issues that were raised in the AU report on Zimbabwe’s 31 July elections on security sector reforms, the voters’ roll among other issues need to be attended to before such an election. We need political hygiene. We need to re-engage the international community. No one will invest in a country with an illegitimate government,” said Biti.