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Dollarisation way to go: Biti

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Former Finance Minister Tendai Biti said the Zimbabwean economy should not be run in an amateurish way and called for immediate dollarisation among  a plethora of measures to stop the bleeding.

The Harare East Member of Parliament said there is need for immediate action to stop the economy from its current bleeding state and one of the actions to take is to pay civil servants in United States dollars and promote a culture of saving.

His comments come amid rising inflation and runaway exchange rate at formal and informal markets.

Prices of basic commodities have shot to levels beyond the reach of many.

“What it means is that (Finance Minister Professor) Mthuli Ncube and the government are failing to control the exchange rate which is running away and inflation that is running away,” Biti told Business Times last night.

“You cannot run an economy like a boozers (soccer) club. It’s like old-fashioned football of yesteryear, the kick and run kind of football hoping it will just hit the head of someone and just hope it will end in the nets.”

On what he would do to normalise the crisis, Biti said: “As a matter of urgency I would dollarise.”

“I would float the Zimbabwe dollar to find its actual mark, I will scrap the auction system, scratch export surrender requirements. I will pay the civil servants in US dollars and don’t tell me there is no money, there is the money,” he said, adding that there is also a need to pay pensioners in US dollars.

“I would call for the restoration of savings and most importantly, I will stop corruption. Zimbabwe is losing US$3bn from illicit financial flows. We have to stop the corruption.”

Speaking in Parliament yesterday, Makoni Central MP David Tekeshe said high inflation has eroded the Constituency Development Funds (CDF) before they are being disbursed.

“I went into a shop today and I was shocked to find that the local currency was around ZW$6 000 and ordinary people can no longer afford bread. We need to come to the point of CDF, which is just lying idle because no one wants the RTGS and they charge the black-market rate. The request is that Parliament could negotiate to benefit from the auction floor so that this is looked into because ZW$21 million has gone down to US$4 000 and is no longer enough for the constituency.”

Acting speaker of Parliament Tsitsi Gezi said Tekeshe was raising critical issues that needed to be immediately addressed.

“We are going to notify the responsible authority, particularly the Minister of Finance and Economic Development, so that he looks into the issue of the CDF which is ZW$21m. Indeed, it has been eroded by inflation and as inflation continues, it continues to lose its value.”

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