Zimbabwe applies to join #BRICS - Receives stern warning from former Zimbabwean Finance Minister

A de-dollarization debate started after Zimbabwe applied to join the BRICS group.

According to former Zimbabwean finance minister Tendai Biti, the current administration of President Emmerson Mnangagwa could create a "disaster" if it ditches the dollar.

In an X post on Thursday, Biti wrote that any move away from the greenback was a "zany attempt to follow the global de-dollarization agenda being pursued by BRICS and other new world order advocates." She was referring to the bloc of Brazil, Russia, India, China, and South Africa.

He wrote that this move would be an absolute disaster for workers and pensioners.

He said Zimbabwe does not have the economic conditions to ditch the dollar.

With Zimbabwe applying to join BRICS's New Development Bank, Biti's comments add to the intense ongoing debate over de-dollarization. As a result of the Ukraine war, Washington has heightened fears that it is weaponizing the dollar-denominated global financial system against Russia.

A recent summit in August even discussed the possibility of creating a common BRICS currency.

There was no announcement about a common currency during the summit, and BRICS leaders made contradictory statements about de-dollarization.

By increasing lending in local currencies, the BRICS bank is also de-dollarizing.

The views Biti expressed on de-dollarization also reflect local Zimbabwean concerns about the country's economy. Inflation in July was 101.3% higher than a year ago.

In July, John Mangudya, Zimbabwe's central bank governor, told Bloomberg that 75% of the country's transactions are conducted in the US dollar.

As a result, Zimbabwe's government banned the use of foreign currencies as legal tender in 2019. Mnangagwa said the country's economy was "at the mercy of the US dollar pricing, which has been a root cause of inflation."

In June 2022, the country reversed the ban to control inflation.

Zimbabweans are concerned about the spillover effects of de-dollarization in emerging economies, including Zimbabwe.

Lovemore Mutenha, a liquor store owner in Zimbabwe, told the Associated Press in August that "the dollar has given us our life back. We can't live without it." The Zimbabwe dollar is unstable, and we have been burned before, so it is impossible to budget with it.

Biti, Zimbabwe's central bank, and BRICS's New Development Bank did not immediately respond to Insider's requests for comment.