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MPs baying for Mthuli Ncube's blood

by Staff reporter
13 Mar 2020 at 15:46hrs | Views
IRATE legislators are baying for under-fire Finance minister Mthuli Ncube's blood - in the wake of his new economic measures which have led to the collapse of the wobbly Zimbabwe dollar and hefty hikes in prices of basic goods.

This comes as Ncube himself has readily admitted that the local currency, which he prematurely re-introduced last year, is creating immense problems for the country - including sky-high inflation and economic instability.

Debating in Parliament following Ncube's decision on Wednesday to float the Zim dollar, MPs said he had failed dismally to revive the country's dying economy, and thus now needed to pack his bags and go.

Highfield East MP, Eric Murai, led the push for Ncube to quit his ministerial post.

"I want to understand from the minister of Finance and Economic Development … people are suffering in this country and are at the stage that … it is now uncontrollable, when do we expect him to … resign?" Murai asked.

Hwange Central MP, Daniel Molokeli, weighed in saying Ncube's policies had failed to inspire confidence, to the extent that they were confusing ordinary Zimbabweans.

"The minister of Finance should explain why it is possible for Zimbabweans to pay in US dollars when all the rules and regulations and the salaries are in RTGS.

"Where do they expect an ordinary Member of Parliament like me to have money in US dollars. How do I get that money?

"As things stand right now, the only source of that money is on the parallel market," Molokeli said.

"What I am worried about is that there is a gap between where the minister of Finance is and where the people on the ground are.

"The only reason why the minister is coming up with one statutory instrument after another, task force after another is because he does not seem to understand what is happening on the ground.

"The only way forward for the minister of Finance is to resign immediately," Molokele added.

On his part, former Finance minister in the government of national unity, Tendai Biti, said the floating of the local currency would not work if the supply of foreign exchange was not free.

"Inflation is going to shoot up. As I am talking to you right now, the price of 10 kilogrammes of maize-meal is now around $200. By the end of the week it will be around $400.

"I urge the Speaker to take into account the fact that a currency is a function of two things. It is a relationship between your exports and your imports.

"Right now, we have a deficit in our current account. For every dollar of foreign currency that comes in as export earnings, four dollars are going out as imports. The equation is not balancing," Biti said.

"Honourable Speaker, a currency is also a function of confidence. There is no confidence in my brother, the esteemed minister of Finance and Economic Development.

"So I just want to say to my esteemed friend that do the right thing. Repeal SI 33/2019 and SI 142/2019. Allow the two currencies to co-exist.

"Let the market settle on the exchange rate. Encourage productivity, eliminate export surrender requirements, budget deficits and the rogue printing of money by the reserve bank," Biti said further.

Norton legislator, Temba Mliswa, told the National Assembly before Ncube's arrival in the august House that the minister had "totally failed" and as such President Emmerson Mnangagwa should fire him.

"We cannot continue like this. If the president is not happy with the dogs that he is hunting with, he must change the dogs and hunt with new dogs.

"The president is a hunter and he must hunt with his dogs. If his dogs are not able to bite, you change them as a hunter and you find those that can bite," Mliswa thundered.

But Ncube brushed aside the MPs' concerns and said floating the Zim dollar was part of his efforts to try and fix the country's problems.

"He (Biti) is well aware that this country has no shortage of foreign currency in terms of the quantum of supply.

"In 2018, our export proceeds were about $6,4 billion. In 2019 we had almost $7 billion, which is almost equal to the demand.

"So, the supply of forex is not the problem. The problem is the system that allocates prices in foreign currency and that is what we are fixing," Ncube said.

"On the floating rate, it is not just a floating rate but a managed rate to make sure that it does not run away unnecessarily.

"The problem with a freely floating exchange rate is that it over-prices the risk premium and, therefore, overstates the exchange rate as is the case right now," he added, as he batted away calls for his resignation.

Source - dailynews

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