Chinamasa’s finance plan immoral: Biti

Former finance minister, Tendai Biti, has described his successor’s move to securitize the country’s resources for lines of credit as ‘’immoral.’’ The new minister, Patrick Chinamasa, recently appealed to the African Development Bank for technical support to build expertise on how Zimbabwe can leverage its resources to raise foreign capital and access external lines of credit.

Former finance minister, Tendai Biti
Former finance minister, Tendai Biti

“Securitization is immoral in that what is underground, to be used by future generations as well, is now being squandered by the present generations. On paper it can work and has been tried in countries like Angola and South Sudan with hydrocarbons, which are more easily quantifiable and where price discovery is easier.

In countries without oil it has hardly been tried and has not worked,” said Biti. “The truth is any other resource is extremely difficult to quantify and to give a monetary value . How do you quantify gold or platinum underground where there has been no geological study, as in our case? What value do you place – particularly in the context of the present sphere of volatile prices,’’ argued Biti on his Facebook page.

He also emphasised that a huge amount of skill and expertise was required to conclude these transactions. “My greatest fear is that given the absence of capacity in government for this kind of cutting edge skill, Zimbabwe will be exploited by any potential investor, if they are any. More importantly it is difficult to see these deals being liberated from the scourge and cancer of corruption. The bottom line is that in the context of present day Zimbabwe under this regime, securitization is literally selling the country out,’’ said Biti.

Zimbabwe faces a severe liquidity crunch and is failing to get liquidity both locally and internationally because of the current external debt overhang and bad international credit rating. The nation urgently needs finance liquidity to extend to local industries that have closed shop and to boost the capacity and competitiveness of the existing ones. Agriculture too requires huge funding.

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