Following the recently introduced Statutory Instrument number 127 of 2021, where government has instructed the business community to use the Reserve Bank of Zimbabwe (RBZ) auction floor exchange rate, netizens and twimbos on social media have come out guns blazing, blasting that move by government. Some are now beginning to compare Lawyer Tendai Biti, the former Government of National Unity (GNU) Finance Minister and Prof Mthuli Ncube the current Finance Minister.
Prophets of doom are now beginning to say that the move by government to instruct business to use the RBZ auction rate would see the goods exiting the formal market into the informal market. Some have already started claiming that the long forgotten situation that prevailed in 2008 where shops emptied their shelves into the black market in response to price controls by government would soon come to haunt the buying public.
One thing people should avoid is to compare the two who worked in different political and economic environments.
To start with, Biti worked during the inclusive government in which all players in the country were working in unison. Decisions were made together and the business community was not antagonistic to government policies. Actually the global political agreement that was signed among three political parties in the country brought together warring parties.
Those with sharp memories would appreciate that Biti came in after the then Acting Finance Minister Cde Patrick Chinamasa had, in January 2009, introduced the multi-currency regime during his National Budget presentation in parliament.
When Biti came into office in February 2009 the signs of economic recovery were starting to emerge. Currently Prof Ncube is facing a different scenario in which the economic saboteurs are working against government policies. The business community and government are not working in unison like what happened during the GNU era.
Some economic saboteurs are channelling a lot of foreign currency into the black market as a way of creating unmanageable inflation as the rise in black market rate causes prices to rise. If prices of goods increase, inflation increases also. While the economic saboteurs are working tirelessly to bring this economy down, Prof Ncube had been coming up with various monetary policy interventions that managed to bring down inflation from 348% in November 2017 to the current rate of 161.91% as of May 2021. In April 2021, it was 194.04%, this shows that Prof Ncube is working hard to tame the inflationary environment in a country where the business and government are not in unison.