Biti, Mthuli clash in Parliament: Videos.

There was drama in parliament after former minister of finance Tendai Biti confronted current minister Mthuli Ncube over the poorly performing economy. Former Minister of Finance Tendai Biti took current Treasurer boss Mthuli Ncube to task over his failure to turn around the economy 10 months since his appointment.

Biti-MthuliNcube is on record as saying that his work should be judged after 6 months. The duo came face to face in Parliament on Wednesday during the question and answer session. Said Biti: Mr Speaker Sir, when the Minister of Finance assumed office, he promised to mitigate the challenges facing the economy but, 10 months later the economy is in a tailspin.

In response, Ncube asserted that he had indeed put the economy on a better footing by, for instance, by eliminating the deficits. Said Ncube: The fiscal position of the country has been turned around in six months, in the sense that we have eliminated the deficits on month by month basis.

We have surpluses and now we start focusing on how to deal with social protection issues so as to protect vulnerable members of our society from the vagaries of inflation including the drought and the cyclone. We are beginning to do that. Biti however, was not through with his questions. He then asked Ncube:

There are massive shortages. Given the runaway inflation which is now around 300% and given the serious implosion of the black market rate which I am told is today between 7.1 and 8.2.

Why as a matter of policy is the Minister simply not demonetising the RTGS$ and the Bond note and revert to the dollarisation regime? Ncube told Biti that when he was the Finance Miniter, he effectively destroyed the country’s ability to sustain its own currency. Said Ncube:

Pertaining to the demonetisation of the RTGS dollar and adopting the US dollar, what happened when the US dollar was adopted basically as a defacto currency, during the time that the Hon Member as a Minister, what he (Biti) did is he destroyed the country’s ability to conduct its own monetary policy completely.

So the Central Bank was taken out of all monetary policy ability and what was left was fiscal policy only. Those are the facts and I have said that from the beginning that we need both legs for macro-economic management, the fiscal and monetary policy legs.

Ncube went on to say that Zimbabwe cannot dollarise as some banks have refused to supply the country with United States dollars for fear of punishment by the US government for violating the sanctions regime imposed on the country. Ncube said that he was not going to fight the black market as it will always be there.

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