Currency Crisis: Mutodi roasts Mthuli Ncube for sleeping on duty
Former Information deputy Minister Energy Mutodi has hit out at Finance Minister Mthuli Ncube for taking too long to realise that buying and selling foreign currency has become the primary business in the country.
Minister Mthuli Ncube is trying to play firefighting with the black market’s runaway exchange rate for the US dollar.
Measures to create currency stability using the RBZ auction system have dismally failed as some people are accessing the forex and selling it on the black market.
This has resulted in businesses pegging their goods in US dollars at the expense of the local currency.
Speaking in the National Assembly, Mutodi reminded Mthuli Ncube of what he used to say before he became a minister.
Below is the full text of the Honourable Energy Mutodi debate in the National Assembly.
HON. MUTODI: Thank you Madam Speaker Ma’am. My point of clarity to the Minister is that before his assumption of duty as a Minister of Finance, he indicated that bad money drives out good money. He was referring to the use of a surrogate currency, the bond notes that we are using. Surprisingly, the Minister has maintained the use of bond notes. This means the use of dual currency for the economy. What measures have we put in place as a country to ensure the sustainability of this dual currency? We know it very well, he is a professor of economics but a dual currency needs to be delicately managed to ensure that we do not lose public confidence in the banking sector. The Minister must clarify the measures that he has put in place to ensure that the dual currency is sustainable?
Madam Speaker Ma’am, we have seen recently an exchange rate driven inflation. I want to thank the Minister and His Excellency the President for the temporary hold on bank lending. However, we need clarity on what is going to be done to ensure that critical manufacturing companies continue to survive and be able to provide goods on supermarket shelves? Why did it take a long time for authorities to realise that the primary business on the market was now buying and selling foreign currency? In the first place, who is supplying the RTGS dollars to the parallel market? Is it the banks? Is it the contractors that Government has engaged in the road rehabilitation programme? Who is actually supplying the RTGS?
With the contractors, it is clear that when you want to do a major project like road development, obviously you need a long-term loan to finance it. How are we financing the road project Madam Speaker Ma’am? If you are financing from our fiscal budget, is that not contributing to the exchange rate driven inflation because the contractors are being paid in RTGS and they seek the USD on the black market. That affects the ordinary person who is earning a ZW$40.000 salary. Obviously, they are paying rentals and fuel in USD. We need clarity on that Honourable Minister.
The last issue I will talk about is the economic planning investment. Are we planning the economy? Are we estimating our macro-economic variables on time? How our money supply, our interest rates, inflation and other factors are going to perform over time such that not only the local people but also international investors can have confidence in our economy. Also, the political risk factor, if you are driving towards attracting investment. We are competing for Foreign Direct Investment with other countries in the SADC region and Africa at large. How have you dealt with the political risk factor? Are we sure that the lack of title deeds on farms is helping us in any way? I humbly submit Madam Speaker Ma’am–
Currency Crisis: Mutodi roasts Mthuli Ncube for sleeping on duty
