Biti warns Zimbabwe heading toward collapse

Former Finance Minister Tendai Biti has sounded a dire warning over Zimbabwe's economic trajectory, claiming the country is collapsing under the burden of failed monetary reforms, rampant corruption, and institutional mismanagement.

In a wide-ranging statement reflecting on the country's economic condition, Biti described the introduction of the Zimbabwe Gold (ZiG) currency in April 2024 as the catalyst for what he termed "economic carnage," triggering a downturn that has severely impacted production, employment, and the livelihoods of ordinary citizens.

"There is carnage in the economy. The introduction of the ZiG in April 2024 marked a significant slide towards collapse, deceleration and shrinkage," Biti said. "The ZiG-induced depression has seen companies close or exit and a massive devaluation of social services."

Biti, who served as Finance Minister during the Government of National Unity from 2009 to 2013 - a period credited with restoring a semblance of economic stability - criticised the current administration for plunging the economy into crisis through misguided policies and weak governance.

He singled out the struggling retail sector as a victim of multiple pressures, including exchange rate instability, excessive taxation, and overregulation. He added that the informal economy now dominates urban commerce, highlighting the scale of de-formalisation and systemic decay.

The power supply crisis, according to Biti, has become a critical bottleneck for industrial productivity and employment, with the Zimbabwe Electricity Supply Authority (ZESA) failing to meet energy demands.

"ZESA's failure to provide sufficient power is undermining industrial activity and fuelling job losses," he said.

Beyond technical inefficiencies, Biti accused senior officials and political elites of looting public funds under the guise of government operations. He claimed public procurement, the fuel sector, and Treasury disbursements had become "centres of looting," estimating the country loses US$4 billion annually to corruption by what he described as "political cartels and bandits."

He directed sharp criticism at monetary authorities for their handling of the exchange rate and currency reform agenda, branding the ZiG dollar a "myth" meant to facilitate state-backed extraction schemes.

"De-dollarisation is a failed ritual, with 80 percent of all transactions done in US dollars. The ZiG is a myth, a lie, imposed to guarantee extraction through exchange manipulation and fraud," he said.

Biti said the erosion of real wages due to inflation and exchange volatility has left civil servants destitute. Public sector salaries paid in ZiG, he argued, have been decimated by runaway inflation, while the dollarisation of consumer prices continues unchecked.

The human toll of the economic crisis, he added, is already manifesting. University lecturers have been on strike since April, demanding wage adjustments, and over 5,000 teachers have left public service, unable to survive on their salaries.

Biti's assessment adds to a growing chorus of concern from economists, trade unions, and civil society over the viability of the government's economic strategy, especially as inflationary pressures rise and confidence in the local currency continues to erode.

With the country approaching another planting season, observers say urgent policy corrections are needed to avoid deeper social and economic instability.