Biti, Mashakada table alternative economic policy

OPPOSITION MDC Alliance MPs yesterday tabled their party's alternative economic policy, which includes demonetising the surrogate bond note and for the country to join the Rand Monetary Union.

Their presentations were made through a heated motion on economic hardships introduced in the National Assembly by Hatfield MP Tapiwa Mashakada and seconded by Harare East MP Tendai Biti.

Mashakada said the country missed a big opportunity during the November 2017 Operation Restore Legacy, where, instead of rushing to elections, a national transitional authority should have been introduced to restore confidence in the economy.

"The solutions to our economic problems right now is to join the Rand Monetary Union and stop government borrowing and issuance of Treasury Bills, tighten our borders for revenue collection because right now, the uncollected revenue is $4 billion, and we also need leadership or political will to grow the economy," he said.

Mashakada said there was also need to decommission the bond notes, and price goods in rands instead of in the United States dollar because the country was importing most of its goods from South Africa.

"The reasons we should adopt the rand is that 60% of our imports, like fuel and medicines, come from South Africa, and if you buy something in SA, for R100 and then sell it for $100, then you are causing inflation," he said.

Mashakada criticised the stabilisation measures recently announced by Finance minister Mthuli Ncube.

He said Ncube was pursuing economic stabilisation, which is about balancing the books and yet the country needed a structural transformative agenda to kick-start the economy.

"You just want a good balance sheet through servicing debts, but at this juncture, can we pay $5 billion to service debts when our roads are in bad shape and there are no drugs?

These multilateral institutions are debt collectors and they dangle the carrot and then later tell you to reform this and that," Mashakada said.

"What we need to do as a policy alternative is to go for the Highly Indebted Poor Countries Strategy (HIPIC), and we qualify for that. We speak to the creditors so that we pay a proportion and then the rest we use it to build schools, hospitals and other infrastructure."

Biti said the economy has been battered for years, with self-induced economic reflections.

He said the economic malaise was linked to political legitimacy, where people that allegedly "rigged the elections cannot rig the economy".

Biti said Zimbabwe was going back to the 2008 recession characterised by the absence of demand, where 95% of unemployed people were chasing a few goods.

"Such recession in less than two years is a sign of failure and it was only experienced by Germany in between two world wars, but Zimbabwe is not in a war and the problems are man-made," Biti said.

"The other challenge is the huge budget deficit in excess of 25% of gross domestic product, and we spend money as if it grows on trees, and the challenge of our deficit is that it is for consumption, hiring luxury jets, bribing the population during elections and buying luxury cars."

He said government's overdraft facility at the Reserve Bank of Zimbabwe was now at $2,4 billion and it was raiding people's nostro accounts to finance it, resulting in the cash shortages.

"The $21 billion debt is criminal and it means that even a child being born now owes money which they do not know about and the dangerous thing about that debt is that you are eating into the future," he said.

"The solution is that we need to bring fiscal consolidation and eat what we kill. We have to go back to the issue of cash budgeting."