Former Finance Minister Tendai Biti has disputed Reserve Bank of Zimbabwe (RBZ) governor John Mangudya’s assertion that Zimbabwe does not have enough US dollars to fully dollarize.
In his Monetary Policy Statement on Monday, Mangudya said it was wrong for Zimbabwe to totally abandon its currency in 2009 as the country did not have sufficient foreign exchange liquidity to meet its foreign currency commitments.
However, speaking during an interview with NewZimbabwe.com on Tuesday, Biti said there is sufficient foreign currency liquidity to support dollarisation, only that the money is being misused. Said Biti:
That is not correct. In his own statement yesterday (Monday) he is boasting that deposits in private companies are US$9 billion, so you cannot tell me that if such money is allowed to circulate there is not sufficient money.
We have got lots of it, he is also boasting of a current account surplus in that same statement, when you have a current account surplus it means that you are exporting more than you are importing, therefore your current account is positive.
So, it is not a question of the supply of US dollars, it is a question of how that money is being used.
They are wasting their time in supporting an expensive non factional auction system that is taking US$40 million a week on the auction systems.
No government can afford that. Abolish the auction system, redollarise, stop taking people’s money through exports surrender requirements and most importantly stop corruption.
They are stealing money out to Mauritius; they are buying houses for their wives and jets for their children and that is the problem.
That statement alone John said there is now US$9 billion sitting in accounts and when the money sits in an account it belongs to the bank and it can do whatever it wants, so there is lots of money in Zimbabwe.
When I left, I left US$6.5 billion, and they actually now have more than what was there during the time of the GNU when the US dollar was working.