Electronic transfers in Zimbabwe just a big lie - Biti

The electronic money transfer system in Zimbabwe is just a big lie living on borrowed time, it will collapse against the pressure of cash demand, President Biti has said.

Addressing a gathering at SAPES last night President Biti said the transactions are just recorded between parties but are not supported by real value of money shifting from bank A to Bank B.

The meeting was discussing the possibility of reintroducing the Zimbabwe dollar as a panacea to economic recovery.

In his presentation, he outlined that the financial crisis in Zimbabwe was not a monetary problem as is presented by many but a fiscal crisis.

He highlighted several disparities in the figures presented by Minister Chinamasa especially the breakdown of the Treasury Bills issued last year. The midterm term fiscal policy review statement of 2016 highlights that some of the resources were meant to finance the budget but more than a billion is not accounted for.

President Biti said the disparity highlights that Chinamasa and ZANUPF are running a parallel government somewhere.

Disparity was also highlighted between rising expenditure against dwindling revenue, the Ministry of Finance has revised expenditure upwards while revising revenue projections downwards.

He also expressed concern over the competing extra-legal activities of both central government through the Ministry of Finance and the Central Bank.

The Reserve Bank of Zimbabwe has of late riveted back to the quasi fiscal activities that were at the centre of an economic abyss which the economy was from 2007.

Several non-monetary facilities including shady loan schemes have been introduced by the central bank, in total the facilities are close to 200 million dollars against the background that the RBZ is factually broke.

Concern was also raised over the issue of the bond notes which have stolen the value in the bank accounts of the Zimbabwean people.

Various exchange rates are in the market against a background of a set exchange rate of 1:1 against the United States Dollar set out in the RBZ Act.

President Biti said the issue of stolen value of money through the bond notes will soon spill into the courts in a case that he is also involved.

The bond notes have also caused distortions in the market driving inflation upwards, more importantly the bond notes have driven away the remaining forex which was in circulation.

Despite warnings that Gresham's Law would apply, the government adopted the fake currency which was purported to be backed by the Afrexim bank.

President Biti told yesterday's meeting that the scheme is fake with the 200 million facility's term sheet yet to be seen by anyone. He said the talk of an extra 600 million was yet another myth whose term sheet will also not be availed because it is non-existent.  

President Biti therefore rejected the idea of introducing the Zim Dollar saying the people of Zimbabwe would reject it because they do not trust the government therefore the currency will become an immediate casualty.

1. In a raft of measures President Biti proposed the following.
2. A lasting solution to the toxic politics which underline the economic decisions which have created the current crisis.
3. Supply side solutions which will see the industries producing again.
4. Establishment of an emergency recovery fund meant for recapitalisation of distressed companies.
5. A holistic fiscal reform including retrenchment of ghost workers and the jettisoning of unnecessary parastatals which contributed 2 billion of the domestic debt.
6. Initiating the creation of a regional currency or alternatively joining the rand monetary union
7. Building reserves of up to 7 billion United States Dollars before the thought of reintroducing a currency.
8. Macroeconomic stability based on maintaining a primary balance and cash budgeting.

Together Another Zimbabwe is Possible
PDP Communications