Finance minister Tendai Biti on Wednesday told Senate the discarded Zimbabwean dollar would only be brought back into circulation after exports have scaled the $10-billion mark.
He said bringing back the Zimbabwean dollar today would cause it to be hit by what he described as “another tsunami” because both the capital and current accounts were operating in the negative.
Biti was responding to questions by Midlands Chief Zama Nthua Mkwananzi Ngungumbane and Matobo Senator Sithembile Mlotshwa, who wanted clarification on whether there were plans to reintroduce the local currency and whether people who lost their Zimdollar savings would be compensated.
“The Zimbabwean dollar is going to come back – there is no question about it, but there are factors for government to determine when it is coming and these are the relationship between imports and exports and that relationship should balance,” Biti said.
“Our exports are around $3 billion, but our imports are around $8 billion and that equation is not balancing and so you cannot bring back the Z$ until we narrow the current account and until this country is able to export goods of at least $10 billion. Both our capital and current accounts are in the negative and our balance of payment position is in the negative and if we bring the Zimbabwean dollar today, it will be hit by tsunami such that those trillions will even be more.”
On exorbitant lending rates charged by banks, Biti said the problem with Zimbabweans was that people still thought in Zimbabwean dollar terms when we were in a United States dollar currency era.
“People are trying to bring down the US$ to the level of the Z$ and banks are putting 10% to 15% interest rates on lending yet this is a US$ economy. In America if you are given a 3% interest rate they will say there is something wrong with that bank, yet in Zimbabwe just to get a plumber to fix your geyser they will charge you $400,” Biti said.
He also blasted heads of parastatals for living lavish lifestyles and bleeding the entities through mismanagement.
“We have refused to give them money and we have not financed any parastatal, but we are also sitting on the value of money because these parastatals like the GMB can be valuable companies,” he said.
He said the Constituency Development Fund would be considered in the next budget and between $20 000 and $30 000 set aside for that, but said a proper legal framework was necessary.