He was commenting on Ncube’s Wednesday move to set up a taskforce to manage foreign currency rates and the thriving parallel market.
On Wednesday, the Finance Minister announced a raft of measures, which he said were aimed at stabilising the spiralling parallel market exchange rates, which had seen the Zimbabwe dollar losing its value by almost 50% in one week.
The latest move will see banks take a bigger role in foreign currency trades, narrowing the gap with the unofficial market by allowing trade on a more transparent platform.
“Zimbabwe has had no transparent and effective foreign exchange trading platform for a long time. Consequently, official rates have not been effectively determined, while a thriving parallel market has developed,” Ncube said.
However, Biti shot down the Finance Minister’s announcement telling Ncube that as long as he continued tinkering with the economy, the foreign currency taskforce would not achieve anything.
“As long as there is no productivity, an expansionary fiscal policy and deep budget deficits, as long as there is corruption and export surrender requirements, as long as there is John (RBZ governor Mangudya) and his money printing quasi fiscal activities Mthuli (Ncube’s) tinkering won’t work,” Biti said.
Meanwhile, business analysts and industrialists have also called on Ncube to be realistic and practical when crafting fiscal policies aimed at achieving economic stability in the country.
Brains Muchemwa described the latest initiatives by Ncube as neither “necessary nor sufficient.”
“The floating of the exchange rate does not at all stabilise the exchange rate. In fact, it’s
neither a necessary nor sufficient condition to stabilise the exchange rate,” he said.
“What will stabilise the rate is a commitment by the government to cease all subsidies whose financing have always resorted to printing money outside the normal budgetary framework.”
Top industrialist and past president of the Confederation of Zimbabwe Industries (CZI), Sifelani Jabangwe said while the intentions embedded in the policies are well appreciated, there was need for a holistic commitment.
“There is need for honesty and will among the responsible parties to end the obtaining instabilities,” he said.
Jabangwe said the initiatives were coming when several companies had lost hope in the Zimbabwe dollar, which has been fingered as the cause behind the poor performance of the national economy.
Last month, the International Monetary Fund warned that delays by the government in implementing foreign exchange and monetary reforms risked undermining the new currency and Zimbabwe’s international re-engagement on debt arrears.