Mukupe tells Senate Chinamasa inherited a bankrupt Ministry of Finance with only $217

Q & A:

HON. SEN. MUMVURI:  My question is directed to the Minister of Finance and Economic Development.  Hon. Minister, what is the Government doing to reduce the immediate cash shortages and kill the black market in the country?  Whose money is it anyway at Roadport and Eastgate, whose money is that?  What are you doing with those service providers, especially of the Asian community who demand cash upfront.

THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. MUKUPE):  Before I answer the question, it is important that you understand what actually the source of the cash problem is.  The source of the cash problem emanates from two issues.  The first issue is that we have a shortage of foreign currency – I would not want to call it a shortage of foreign currency.  We have got a situation where as Zimbabweans, we have got a huge appetite for exported goods.  If we had a situation where we loved our own goods more than we loved exported goods, I think the problem that we have in terms of shortages of foreign currency would be less.  That is the first thing – [HON. SENATORS:  Inaudible interjections.] –

THE ACTING PRESIDENT OF THE SENATE:  Order, order.  Hon. Senators are worried about the different definition of exported goods.  I think it should be imported goods. They are wondering what is exported goods.

HON. MUKUPE:  I am sorry, it is imported goods.  Because we have got a shortage of foreign currency, what ends up happening is that the few currency that is being made available outside the formal system, you end up having a situation that most of the bond notes end up in the hands of a very few people and money ends up not circulating.  That is one of the shortages of cash.

The second situation that we have got is that you still remember when we had the Government of National Unity, there used to be a talk of ‘eating what you kill’ under the Biti-Gono era.  What happened during that era was that there was an expansionary credit programme that was put in place.  I remember that in January 2013 – [HON. SENATORS:  Inaudible interjections.] –

THE ACTING PRESIDENT OF THE SENATE:  Order, order.  This is a very important question and I believe you would want to hear what the Minister is saying and get it from the horse’s mouth.  Hon. Minister, can you continue?

HON. MUKUPE:  Thank you for your protection.  The nice thing is figures do not lie.  In January 2013, the former Minister of Finance, Tendai Biti announced that Government had only $217 in its coffers when he left office.  He left office with a situation where Government had a domestic debt that was running close to $5 billion.  What Hon. Chinamasa inherited was basically a bankrupt Ministry of Finance where only what was available was debt.  That resulted in him having to pay for that debt using Treasury Bills.  That is why you find that we ended up having a lot of Treasury Bills that came into the system.  The next thing is that these people who were being paid by Treasury Bills ended up knocking on the doors of the banks wanting to withdraw their money.  All of a sudden, we have a situation that we have so much pressure and a lot of people queuing in the banks.  This domestic debt situation, the expansionary credit programme that came in as a result of the ‘eat what you kill’ from the Tendai Biti era – that is the effects that we are feeling now – [HON. SENATORS:  Inaudible interjections.] –  So what you have…

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