2023 Will Be A Rough And Tough Year For Working Families, Says Tendai Biti
Former Finance Minister Tendai Biti has warned that working families in Zimbabwe will experience severe financial hardships in 2023 due to runaway inflation that will be worsened by government mismanagement of the exchange rate and “unrestrained spending”.
Zimbabwe is currently experiencing three-digit inflation, exchange rate volatility, and a liquidity crunch.
Biti, who is Harare East MP (CCC) predicted that the exchange rate will continue to slide adding de-dollarisation has utterly failed. He said:
2023 will be a rough and tough year for working families in Zimbabwe. Inflation will remain in hyperinflation mode driven by the total mismanagement of the exchange rate, unrestrained government spending, the printing of money by the Reserve Bank of Zimbabwe and corruption.
End of the year, the Zimbabwean dollar was trading at ZW$1200 to US$1. The rate will continue to slide driven by huge import demands, money printing and a lack of confidence in the ZW$.
For all intents and purposes de -dollarisation has failed and Zimbabwe is largely a US$ cash economy.
As we have argued in Parliament, output will shrink due to excessive lending rates of 200%, the crippling power supply, overregulation and the unstable exchange rate. Zimbabwe’s growth will therefore be less than 1%.
The failure to address the sovereign debt crises is an absolute shame. The debt crisis is placing a development premium on Zimbabwe as same is unable to access huge amounts of capital seating with the IFIs.
Genuine structural reforms are required which are way beyond ZANU PF.
Biti, who served as the country’s Finance Minister from 2009 to 2013 proposed the creation of a “new Transformation Consensus”. He said:
Most importantly a new Transformation Consensus is required that will focus on recalibrating the political polity to come up with a new social contract and secondly attend to the developmental and social deficit.
Like the Asian Tigers, Singapore, Taiwan, etc Zim must find a way of bypassing the Industrial Revolution and fast trekking itself into the 22nd Century.
Put simply, how do we build a US$200 billion economy in the next ten years with a per capita income of US$6000?
This is the Great New Zimbabwe Dream. It will happen sooner rather than later.