1)The regime has announced a potpourri of contradictory, self defeating , punitive & vindictive measures with the intended aim of stopping or reversing the dramatic& rambacious free fall of the Zimbabwean $ &the consequential inflationary spike experienced in the last two weeks
2)Truth is the measures are I’ll thought& reflective of a paranoid moribund incompetent regime that believes everything&everyone is an enemy&a saboteurA regime that blames everyone except itself for the humongous mess it has plunged Zim intoA regime that sees shadows everywhere
3) The dramatic fall of the exchange rate stems from the introduction of the Zim$ when the necessary preconditions were absent . It stems from a huge mismatch between supply & demand . It stems from the failure of the Dutch auction system. It stems from a huge budget deficit ..
4) ….monetized through the printing of money . It stems from corruption & the billions of Zim$ being pummeled into the system from illegal deals Given this only full & unmitigated re-dollarization provides a short term solution. Anything else , including regime s new measures…
5)….is an absolute joke and a sheer worst of time Policy making must never be allowed to be anecdotal or a product of beer hall diatribe . The new measures smack of that .Broad sweeping statements& conclusions are made without evidence &
data. Major decisions are made without ..
6) … analysing the legalities of the measures or their consequences on the macro or micro level . We have always argued that this is the worst government in the history of governments & the latest measures prove that .
7) The key points of the new measures are as follows a) continuation of the Dutch auction system. b)Suspension of all lending by Banks. c) Suspension of major services by stock brockers.
8). …d) Increase in Capital Gains to 40% from 20 % on shares sold in less than 270 days e)2 % levy on US$ cash withdrawals above a $1000. f) Increase in IMMT tax on US$ transactions to 4 % & 2% on Zim $………
9) ..g) Retailers & businesses allowed to charge in US$ on a willing buyer willing seller exchange rate regime. h) US$ taxes to government now to be paid on the willing buyer willing seller exchange rate regime .
10 ) We now await the legal instruments necessary to effect the above measures .Save to say that massive litigation is inevitable. For instance it is blatantly unlawful to ban banks from lending when it is their core business The new taxes & proposed civil penalties are unlawful
11) The truth of the matter is that Zimbabwe deserves better . It deserves new leadership . Sure , #NgaapindeHakeMukomana
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1)Yesterday Professor Tony Hawkins and I spoke at the Africa CEO Roundtable. I submitted that the Zim crises had been characterized by regular cycles of Fiscal Implosion the latest being the May 2023 meltdown . These implosions had in fact become institutionalized confirming ..
2) …Zim is State in Permanent Crises. At the root of the Fiscal Implosion is a regime that can’t live within its means. Therefore at any given time the economic crises has been caused by an expansionary fiscal policy that has created huge budgeted deficits monitized through ..
3) ..the printing of money. On Black Friday 14 Nov 1997 the Zim $collapsed by 70% due to the unbudgeted payout to war veterans.The melt down of 2004 to 2008 was caused by serious printing of money to cover fiscal obligations. Under Mthuli Broad money has grown by 12 000% in 4 yrs
1) The defining feature of all failed incompetent regimes is the capacity for adhocratic incoherent panicky decisions.The latest policy announcements by the Ministry of Finance are a leviathan manifestation of the crises of leadership arresting Zim.
2) Four measures have been announced namely 1) removal of duty on basic imports 2)assumption of RBZ debt 3)removal of Export Surrender Requirements 4) pre announced envelope on FX auction With respect these measures will not halt the collapse of the ZWL$ nor reverse the meltdown
3) We contend that the real cause of the macro instability is the failed exchange policy .De - dollarization has failed &failed in absolute terms .To achieve stability & to contain inflation regime must dollarise & float the Zim $ .Civil servants & pensioners must be paid in US$
1)Zimbabwe is in the middle of a structural economic crises characterized by poverty ,disequilibrium, high inflation,an exchange rate crises& total collapse of public services.For the third time in 20 years Zim is in the middle of yet another self induced recession created by ..
2)…high borrowing costs ,relentless inflation & a squeeze on government payments to contractors. The seismic headwinds required boldness honesty &brinkmanship Sadly the #Budget2023 presented today was a banal self serving ritual in narcissism&power retention excesses , months
3) …before the 2023 election. An honest budget ought to have been presented in US$.After-all more than half of government taxes are now being collected in US$.This would then have allowed civil servants to be paid in US$ .This would also have required Gvt to simply dollarize
1)There are 4 issues central to agriculture finance which will be addressed First is ensuring that land is a bankable asset. We have made it clear that all farmers must be granted title which they can use as collateral. Without title land remains dead capital with use value only
2)With land that can be hypothecated farmers can be funded through the bank sector. Remember before 2000,74 % of banking lending was to agriculture.Second agriculture subsidies need to be revisited .Zim must abandon the current Command Agriculture model that creates dependency
3)..&arbitrage. As the Auditor General s Reports confirm since 2016 ,Command Agriculture has been used to systematically loot public coffers. Supply side subsides must be provided to vulnerable farmers to break hold of cartels now choking agriculture through contract farming
1) The Minister of Finance has presented his 2022 mid term review & budget statement . It was painful to indulge in an hour of a pointless,tired monologue .An absolute damp squib.A huge opportunity was missed to address fundamental disequilibrium in the economy centered around …
2) 7 key issues that are 1) hyperinflation 2) exchange rate collapse 3) collapse in public sector wages 4) collapse of the social sector 5) low out put 6) deficit financing & the national debt 7) tax reform .Sadly the gvt missed a glorious opportunity of addressing key issues
3) Failing to address the key challenges of the day was a cowardly criminal omission that in any event has been the hallmark of Mthuli s tenure. To compound matters Mthuli then proceeded to make shocking announcements on a supplementary budget & some tax increases .
1) Tomorrow the Minister of Finance presents a mid term review and a Supplementary Budget . The Review comes in the backdrop of an economy arrested by headwinds contradictions&policy distortions. It comes in environment dominated by hyperinflation, exchange rate collapse &poverty
2) The Review must address the issue of money creation so key to the crises of over accumulation that has taken Zim back to 2008. It must address issue of a falling Zim $ &a collapsed exchange rate It must address collapsed public sector wages that has crippled the public sector
3)We expect the Review to come up with extremely populist but costly fiscal measures as 2023 draws closure . We expect some nominal relief on tax brackets & rates of taxes in other sectors . But truth is the Review will not touch on key structural issues arresting this economy