Mthuli Ncube Says There Is No Crisis In Zimbabwe

Finance and Economic Development Minister Mthuli Ncube believes “all is well” in Zimbabwe and citizens should not panic.

Speaking to journalists after a post-Cabinet briefing on Tuesday, Ncube dismissed claims that Zimbabwe is in the midst of an economic crisis. He said:

What crisis? We are performing well. We have put measures in place to fight inflation, people should not panic, everything is in order, zvinhu zvese zvakarongeka (all is well).

Zimbabwe’s year-on-year inflation is now ranked as one of the highest in the world alongside countries such as Syria which has been ravaged by civil war for the past decade.

The country’s inflation shot to 131% in May, up from 96% recorded in April as the price of basic foodstuffs and fuel continue to rise almost on a weekly basis.

Some economic analysts and the country’s main opposition party, CCC, have called for the full dollarisation of the economy to contain inflation.

However, Ncube insisted there was no reverting back to dollarisation, saying “something very nasty will happen”. Said Ncube:

We have embraced the US dollar, but have also embraced our own currency, the Zimdollar, so there is no rejection of the US dollar.

So, this is what will happen on day one if you adopt the US dollar as your currency, something very nasty will happen.

You will wipe out the entire banking sector because you will have to convert the Zimdollar balances into US dollars.

The banks will have a negative balance, you will have a crisis; a cash crisis because you cannot print US dollars…

The advantage of having a domestic currency circulating along (the US dollar) is that we have been able to manage the cash shortage situation which we have been through before.

The economy, especially the manufacturing sector, will immediately lose its competitiveness against foreign products.

We will then have to do away with monetary policy, you cannot have a country that has no monetary policy, but only has a fiscal policy.

Meanwhile, the Educators Union of Zimbabwe secretary-general Tapedza Zhou said Ncube should do the honourable thing and resign as his economic policies have failed. Zhou said:

The most honourable thing that a minister does is to resign and accept that his economic theories have failed the whole nation, teachers included, that (is) not a crime.

But this is different from a minister who has been reporting things like a surplus in a country where teachers earn five times below the poverty datum line.

It is not a secret, that the Finance minister has failed to address the welfare of civil servants, hence should simply step down and stop losing sleep.

More: NewsDay