Jane Mlambo| Former Finance Minister, Tendai Biti has spoken on the 2019 national budget set to be presented in parliament today.
Biti whose time as Finance Minister brought economic stability said he is expecting the 2019 budget to define currency of use. With Zimbabwe currently using United States dollars, bond notes and RTGS, it is expected that the new budget will inform if the economy is moving to dollarisation.
Biti also said the 2019 budget must demonetize bond notes while preparing the country to join the Rand Monetary Union.
He called for reforms, charging that lipstick reforms will not work as the country needs to contain the volatile situation that has seen people losing money when the Reserve Bank of Zimbabwe seperated RTGS from foreign currency accounts. This is despite numerous assurances from the RBZ Governor John Mangudya that bond notes were at par with US dollars.
Read Biti’s 5 points that define legitimacy of the 2019 budget…
1)The legitimacy of today s budget hinges on5 issues.Firstly it must define its currency of use.If it is the US$ then it must define the underlying exchange rate. It can not maintain the fiction of the normative one bond note equal to the US$.Anything short of this a farce.A joke
— TENDAI BITI (@BitiTendai) November 22, 2018
2) Second the budget must define a path to financial & monetary stability .The financial situation is a mess . The budget must demonetize the bond note,ring fence bank balances and liberise the exchange rate ,whilst preparing the country to join the Rand Monetary Union.
— TENDAI BITI (@BitiTendai) November 22, 2018
3) Third ,will there be deep structural reforms particularly targeted at fiscal consolidation.Big issues are ghost workers who keep ZANU in power.Command Agriculture &Parastatals which are vehicles of patronage . Lip stick reforms yes BUT ZANU will not reform itself out of power.
— TENDAI BITI (@BitiTendai) November 22, 2018
4) Four , the budget must scrap the 2% transfer tax.The tax is terrible economicsOne does not raise taxes in a recession. It is cowardly & opportunistic.Why target revenue when real challenge is run away expenditureThird it’s cruel.People can’t use cash because gvt stole our cash
— TENDAI BITI (@BitiTendai) November 22, 2018
5) Fifth, will the budget provide an anchor for the massive political reforms required as a precondition to any arrears clearance &debt strategy? Not enough to tinker with POSA &AIPPA.Deep legitimacy ,legal &electoral reforms required.Violence & attacks on opposition must stop.
— TENDAI BITI (@BitiTendai) November 22, 2018