Former Finance Minister Tendai Biti has raised alarms about the potential for economic turmoil in 2025 unless Zimbabwe adopts a liberalized exchange rate and injects liquidity into the economy.
In an interview with NewsDay, Biti expressed concern that the introduction of the gold-backed ZiG currency in 2024 has contributed to economic instability, noting that it has worsened the country’s financial challenges. He pointed out that businesses are struggling under the pressure of an uncertain political environment and poor exchange rate management.
Biti warned that Zimbabwe could face a severe decline in demand across industries, as companies are burdened by heavy debt and limited access to affordable financing.
To prevent further deterioration, Biti emphasized the need for lower-cost capital in the market to help businesses stay afloat.
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He also criticized the government’s export surrender policy, which requires exporters to exchange 25% of their earnings for local currency at the official exchange rate. Biti called this policy an unnecessary barrier that restricts access to foreign currency.
Additionally, Biti advocated for the removal of money transfer fees, which he believes hamper economic activity and drive up the cost of doing business.
Biti also voiced concerns about political instability, particularly regarding the possibility of President Emmerson Mnangagwa extending his term beyond the constitutional two-term limit, which expires in 2028. He warned that such political uncertainty could worsen the country’s economic problems, as it undermines investor confidence.
According to Biti, the political situation is driving businesses to relocate to neighboring countries like South Africa, while investors remain hesitant to invest in Zimbabwe due to the instability and lack of trust in governance.
