RBZ Should Be Shut Down – Former Finance Minister, Tendai Biti

After claiming that the government was planning to introduce a new currency, Former Finance Minister, Tendai Biti is now even calling for the Reserve Bank of Zimbabwe (RBZ) to be closed down as it is the source of the current economic problems.

As justification for his assertion, Mr. Biti said that during his tenure as a finance minister he ran the economy without the RBZ’s intervention so that tells its not that of a big deal to close down the central bank. Here’s the full statement by Tendai Biti:

The reason why there has been a delay is that they have been caught pants down by my tweet. They were flagrant. The delay is helping the economy because what government was doing was putting poison into the economy. It was going to introduce disaster in the economy because there have been no economic fundamentals, no exports and the government is spending available money like an aphrodisiac.

There are differences between the approach of the Minister of Finance and the approach of the Governor of the Reserve Bank. The Finance minister has openly blamed the RBZ governor John Mangudya for sponsoring quasi-fiscal activities which have contributed to the large chunk of the budget deficit.

It is common knowledge that the RBZ is the centre of the problems in Zimbabwe. We don’t need the RBZ. In fact, the RBZ should be shut down. I handled that
Ministry without the assistance of the RBZ. They need to strengthen the use of the multi-currency regime and pursue the option of the Rand Monetary Union.

To some extent, I do agree with Tendai Biti, that the RBZ’s policies and activities are the reason why we are in this mess. The RBZ should have made sure that the Chinese and other foreign nationals never shipped out our US dollars some years ago. If the Chinese hadn’t taken our US dollars, we wouldn’t have had US dollar shortages which prompted the introduction of bond notes, which in turn introduced currency black markets and black markets, which in turn fueled inflation.

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