Biti Dissects New Law On The Use Of Foreign Currency In Zim [Full Thread]

Former Finance Minister Tendai Biti, who is also CCC co-deputy president, says Mthuli Ncube should either resign or be fired following the gazetting of Statutory Instrument 118A of 2022 which made the United States dollar legal tender alongside the Zimbabwe dollar.

Biti said Ncube sought to build a career on de-dollarization and the experiment has spectacularly failed after the Government brought back the multi-currency system. Below is Biti’s Twitter thread:

Through SI118A of 2022, Mr Mnangwagwa has issued a Presidential Decree in terms of the Presidential Powers (Temporal Measures) Act Cap 10:20.

Despite his short tenure, Mr Mnangwagwa’s decrees are almost as equal to Mr Mugabe’s decrees over his 38-year tenure.

The new Presidential Decree SI 118A /22 provides for the following:

(1) that the multiple currency regime will exist until Dec 2025 and

(2) that the authorities have the power to freeze any account suspected of Forex abuse in terms of the Bank Use Promotion Act Cap Act

(3) any foreign loan must be repaid in foreign currency

(4) retailers shall not sell goods at an exchange rate above 10% above the prevailing interbank rate.

(5) A fixed fine of ZW$ 20 million may be imposed on any offender.

The Presidential Powers(Temporary Measures) Act which allows a President to bypass Parliament & make laws is patently unconstitutional.

Particularly when those decrees override a specific Act of Parliament. Presidential decrees are an authoritarian abuse of citizens & Parliament.

The re-legalization of the US$ is an embarrassing acknowledgement of the failure 4 years of vigorous pursuit of a de-dollarization agenda that was never going to work.

In a normal country Mthuli Ncube, who sought to build a career on de-dollarization should resign or be fired

There were never conducive conditions for de-dollarization & naturally the experiment failed.

Despite heavy-handedness & the legal force of SI 33 -2019, the economy self-dollarized with 70% of all current transactions conducted in the US$. In this respect, SI118A is old news.

The measure to obligate repayment of loans in currency of disbursements could only make sense if Banks were also obliged to honour deposits in currency of deposit.

Billions of dollars were lost when citizens who had made US$ deposits were now forcibly made to withdraw RTGS$.

The power to freeze accounts and the threatened imposition of punitive fines of $20 million is not only excessive but irrational and patently unlawful.

At the end of the day, it is a lot of hot air. The truth is it is cartels closely associated with the regime that are abusing the system.

Cartels have been the main beneficiaries of the Dutch Auction. They have borrowed billions from Banks which they have used to purchase foreign currency from the auction & from the black market.

The regime knows this. It can’t take action let alone expose its crony benefactors

Truth is economies are not run on coercion & threats. They are not run on ill-thought kick & hope praxis.

They are not run on experiments that reflect deep contempt for any theory or philosophy.

They are run on clarity, consistency and a clear strategic & theoretical trajectory

The truth is economies function on the basis of confidence & the social contract. Economies function on legitimacy.

Thanks to incompetence, inconsistency & total lack of confidence the Zimbabwe economy is in tatters. The country needs a major paradigm. A new beginning.