Former Finance Minister Tendai Biti said that Zimbabwe’s economy is a complete disaster characterised by sharp price increases and rising inflation.
Zimbabwe is experiencing surging inflation, with the prices of basic grocery items such as cooking oil, sugar, mealie meal and bread rising exponentially.
Biti, who is CCC deputy president, was speaking during a Twitter Space titled Uncensored with Mzala Tom on the State of the economy of Zimbabwe: Challenges of State Capture and Corruption. He said:
It’s a complete disaster, I want to start with inflation, I want you to go and read the IMF article 4 report that came out on the 8th of April 2022, it’s a shocking document because normally the IMF is nice to Government because it wants to do business on them.
The IMF says our inflation in 2020 was 837 per cent, if we say it, they will say the opposition is speaking.
Thus, a terrible figure, the IMF also says the growth rate, 2019- 2020 Zimbabwe’s economy shrunk by 11.7 per cent and the IMF uses the word Zimbabwe has been in a deep recession.
Happening in 2022 is nothing compared to 2020, things are terrible, if you go into a supermarket right now, a packet of meat is ZWL$26 000, a bottle of cooking fat is US$7, bread has gone up, our fuel is the most expensive in the World, a bottle of Mazoe is over US$5, sugar has gone up, prices are raping our people in Zimbabwe.
Biti claimed that inflation has gone up 80 per cent in the last two weeks alone. He said:
In 2008 we had inflation because the economy was overheating, we had a crisis of over accumulation, too much money chasing too few goods, what is the inflation at the end of the day.
Inflation is the existence of too much paper money, broad money, the government said last week we control reserve money, we keep reserve money at zero, but the reserve money is not the challenge. The challenge is M3 broad money.
According to Investopedia, M3 is a collection of the money supply that includes M2 money as well as large time deposits, institutional money market funds, short-term repurchase agreements, and larger liquid funds.
M3 is closely associated with larger financial institutions and corporations than with small businesses and individuals.
M2 is a measure of the money supply that includes cash, checking deposits, and easily-convertible near money.