HARARE – Former Finance Minister Tendai Biti has criticised Zimbabwe’s current economic policies, describing them as “fictitious” and blaming them for the country’s de-industrialisation, capital flight, and deepening economic woes.
Speaking to The Zimbabwe Independent during a review of the 2025 national budget, Biti painted a bleak picture of Zimbabwe’s economic trajectory, warning that the country is teetering on the edge of another hyperinflationary crisis akin to 2008.
“We are in a recession. We are in a depression, [which is] most disturbing for Zimbabweans,” said Biti, who served as Treasury chief during the Government of National Unity (GNU) from 2009 to 2013.
De-Industrialisation and Capital Flight
Biti attributed the economic decline to the exchange rate mismanagement by Finance Minister Mthuli Ncube, which he claimed has severely de-industrialised the nation.
“Huge companies are leaving the country. There is massive capital flight, there is massive de-industrialisation. Huge companies are retrenching and closing branches,” he said.
Biti highlighted examples of corporate exits that have left a void in Zimbabwe’s industrial and financial landscape:
- Standard Chartered Bank
- Barclays Bank
- Unilever
- Choppies
“If you go to industrial sites, it is full of grave sites of former functional industrial capital,” he added.
Volatile Economic Policies
Presenting the 2025 national budget last month, Ncube introduced several new taxes, including a Fast Foods Tax, to address economic challenges. However, Biti criticised the measures, saying they failed to address the root causes of Zimbabwe’s economic instability.
“The exchange rate volatilities make it increasingly difficult to calibrate the budget,” Biti said. “They officially devalued it on the 27th of September on their own. So, it is a nightmare for any accountant to do their books in a volatile currency. It should have been indexed and calibrated in US dollars.”
Biti also dismissed the finance minister’s macroeconomic growth projections as unrealistic. Ncube forecasted a 6% economic growth for 2025, despite this year’s projected marginal growth of 2%, citing El Niño-induced drought and persistent power outages.
“The macroeconomic projections do not make sense. You cannot expect the economy to grow by 6% on the basis of assumptions that we have a decent rain season. That is debatable,” Biti argued.
Energy and Climate Challenges
Zimbabwe’s ongoing energy crisis and the impacts of climate change further undermine the economy’s growth potential, Biti warned.
“We are currently going through a heatwave and vicious climate change. Who would ever think that Kariba water would stop falling because the Zambezi River is drying up?” he asked.
He expressed scepticism over the government’s ability to maintain fiscal discipline, particularly with a history of overspending.
“Making an assumption that we will maintain tight monetary and fiscal discipline when this government has never been able to live within its means is also fiction,” Biti said.
Call for Reforms
Biti stressed the urgent need to reverse the tide of de-industrialisation sweeping across the economy, calling for robust policies to stabilise the exchange rate, attract investment, and revive industry.
As Zimbabwe faces mounting economic challenges, Biti’s critique underscores the pressing need for structural reforms to restore confidence in the nation’s economy and halt the downward spiral.
