{{Zimbabwe urgently needs $4 billion to prevent its economy from collapsing, former Finance minister Tendai Biti has said.}}
The southern African country’s economy is expected to grow by a slowed 4.2 percent this year due to the collapse of the manufacturing sector and a slowdown in agriculture.
Mr Biti, now the shadow the Finance minister for the opposition Movement for Democratic Change (MDC), told journalists on Tuesday in Harare that President Robert Mugabe’s government should act to prevent a collapse of the economy.
“The government needs to arrest the deflationary situation. In our opinion as MDC, we think that this economy is in urgent need of a stimulus package to the tune of $4 billion,” he said.
Mr Biti said so far the government did not seem to have any ideas to reverse the economic challenges characterised by tight liquidity and massive company closures.
“We don’t believe that the solutions offered in the 2013/14 budget will succeed,” he said.
“We do not believe that the African Import and Export Bank will offer $100 million to the government of the day.
“The Afrexim bank is a trade bank and it is not designed to offer this kind of assistance.”
The former Finance minister said the government could seek loans from neighbours such as South Africa.
“It is important to engage South Africa like the Rhodesian (colonial) government that arranged an overdraft facility for companies then,” he said. “They should just tuck their tails between their legs and go to negotiate with Pretoria.”
Mr Biti said the government could be forced to re-introduce the Zimbabwe dollar, which was abandoned in 2009 due to hyperinflation, as it battles liquidity constraints.
President Mugabe’s government has repeatedly denied reports that the local currency would be brought back anytime soon.
Last week, the Reserve Bank of Zimbabwe widened the multi-currency basket to include currencies of China, India, Japan and Australia alongside the greenback, South African Rand, Botswana Pula, British Pound and the Euro.
{Movement for Democratic Change (MDC)’s Tendai Biti in picture. The shadow finance minister for Zimbabwe’s main opposition party said urgent action is need to save the country’s economy.}
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