Biti left only $217 in Zimbabwe govt coffers

President Emmerson Mnangagwa's government is blaming former Finance minister Tendai Biti for the deepening cash shortages, saying he left only $217 in government coffers.

Biti became Finance minister in 2009 when a unity government was formed by bitter adversaries former president Robert Mugabe and now late Prime Minister Morgan Tsvangirai after disputed elections.

The power-sharing government, which was dissolved in 2013, managed to stabilise the economy after 10 straight years of decline and inflation which peaked at 500 billion percent.

Grilled about the worsening cash shortages in the Senate on Thursday, deputy Finance minister Terrence Mukupe said they inherited a bankrupt ministry.

"You still remember when we had the Government of National Unity, there used to be talk of ‘eating what you kill' under the Biti-Gono (former Reserve Bank of Zimbabwe governor Gideon Gono) era.

"What happened during that era was that there was an expansionary credit programme that was put in place.

"The nice thing is figures do not lie. In January 2013, the former minister of Finance ... Biti announced that government had only $217 in its coffers when he left office.

"He left office with a situation where government had a domestic debt that was running close to $5 billion.

"What …(Patrick) Chinamasa inherited was basically a bankrupt ministry of Finance where only what was available was debt."

He said the situation led the minister to pay debts using Treasury Bills.

"That is why you find that we ended up having a lot of Treasury Bills that came into the system.

"The next thing is that these people who were being paid by Treasury Bills ended up knocking on the doors of the banks, wanting to withdraw their money.

"All of a sudden, we have a situation that we have, so much pressure and a lot of people queuing in the banks.

"This domestic debt situation, the expansionary credit programme that came in as a result of the ‘eat what you kill' from the Biti era — these are the effects that we are feeling now.

"What we have is that we have got — two problems that are facing our economy.

"The first one is that we have got a domestic debt situation which is at about $6 billion.

"That is set to grow because ...we have got a situation where we have to compensate all the pensioners — the domestic debt is going to grow.

"The second situation is that we have got the foreign currency situation.

"Those two things combined is what is giving rise to the cash shortages that we have."

Reached for comment, Biti dismissed the allegations.

"That is a lie, he is a mad man intoxicated by nyaope (a cocktail of mbanje, heroin, anti-retro-viral drugs, rat poison and acid), there are budget statements which show the truth," Biti told the Daily News yesterday.

This comes after Justice minister Ziyambi Ziyambi on Wednesday told the National Assembly that Mnangagwa never promised the nation that cash shortages will end in his first 100 days in office, in remarks that critics have interpreted as acknowledgement that the promise to end cash shortages in 100 days was pie in the sky.

Ziyambi was responding to a question by Glen View North MDC MP Fani Munengami who had asked when Mnangagwa would fulfil his inauguration promise to end cash shortages in 100 days.

The International Monetary Fund has said excessive government spending is exacerbating the cash scarcity, further jeopardising the health of the external and financial sectors, and, ultimately, fuelling inflation.