Biti says Mthuli Ncube did not present a supplementary budget but a brand new budget

Our next problem is the issue of public debt, the issue of arbitrage and that of corruption.  We are losing revenue of at least US1 billion a year in gold that is being smuggled out of Zimbabwe.  We are losing US$1 billion a year in respect of cigarettes that are being smuggled out of Zimbabwe.  We are now an economy run by speculators.  We are now an economy run by cartels; a few individuals that are controlling this economy and that are forcing this economy to overheat. These are the issues that we expected the Minister to address in his budget.  Regrettably, he does not address these issues, the issue of the exchange rate needed to be fixed and sorted out as a matter of urgency.  How do you sort the exchange rate – you sort the exchange rate by allowing the multiple currency regime to operate, which he has done but secondly, you allow the Zimbabwean dollar to float.  Remove the controls on the Zimbabwean dollar and let the market find a normal stability point in the market.

I was in Kenya a few days ago, they have floated the Kenyan shilling.  The average exchange rate is 1: 6000.  Everyone knows that the Kenyan shilling trades at 1: 6000.  If you go into a Kenyan bank, they will ask you – do you want Ugandan shillings, Kenyan shillings, Tanzanian shilling, Euros or bond?  The Minister must float the Zimbabwean dollar so that there is currency stability in this country.  When you do that, when there is predictability and certainty, then you can budget.  The 2022 Budget was predicated on inflation of 35% but inflation right now is 600% yet the Minister knew this.  It was foreseeable because the black market was there but we also know that the biggest generator of inflation in Zimbabwe is actually the Government itself.

It is the Government that has been paying billions and trillions of dollars to contractors, particularly the contractors that are doing the Beitbridge – Harare Road.  Those contractors are being paid in Zimbabwean dollars and once they get their payments in Zimbabwean dollars, they push it on to Fourth Street.  When they put it on to Fourth Street, the Zimbabwean dollar collapses.  So an expansionary fiscal policy; an ambitious fiscal policy has created money in Zimbabwe.  On his own admission, broad money grew by 345% by May, 2022.  That means the printing machines are in overdrive Madam Speaker Ma’am, you create a crisis of over accumulation.  What is a crisis of over accumulation?  A crisis of over accumulation is when you have got too much paper money chasing too few goods.

We go back to 2008, where all of us were trillionaires.  The last time the Reserve Bank Governor printed our own currency, it was a $100.000 trillion, which could not buy you two bottles of soda.  We now have our highest denominated note being a $100 note which cannot buy you a loaf of bread.  That is failure Madam Speaker Ma’am.  It cannot buy you chewing gum and that is failure.  The Government must stop printing money through an expansionary fiscal policy.  The Government must live within its means and eat what it kills.  It cannot kill a rat and spend money like it has killed an elephant.  That is the basis of the instability arresting this economy.

Madam Speaker Ma’am, I come to the projection.  The Minister estimates that this economy will grow by 4.2%.  He says that this is a reduction from the 7.3% growth rate of 2021.  We know that the growth rate in 2021 was predicated by a strong agricultural season.  Agriculture contributed 36% to the growth rate of 2021, which was 7.3%.  In his own Budget Statement, he asserts that agriculture is going to shrink by -5%.  So, if your anchor or mainstay of the economy has shrunk by -5%, where are you going to get the growth rate of 4.3%.  In our submission Madam Speaker Ma’am, the growth rate of 4.3% is not realistic.  It is not supported by any visible growth in the economy other than mining and must be reduced further.

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