Biti, the Movement for Democratic Change (MDC) party’s Secretary General, will be charged with rebuilding Zimbabwe’s ruined economy and winning the confidence of Western donors.
"This (finance) ministry’s mandate is to create a stable economic environment for all Zimbabweans … and to establish Zimbabwe as a strong investment centre," Tsvangirai told a news conference shortly after appointing Biti as finance minister.
Tsvangirai, who agreed to form a coalition with President Robert Mugabe last week after months of wrangling, will be sworn in as prime minister on Wednesday under a power-sharing deal designed to end Zimbabwe’s political crisis and revive an economy in a state of collapse.
The joint cabinet will be sworn in on Friday.
Zimbabwe was once the breadbasket of southern Africa and one of the continent’s most promising economies but hyperinflation means prices now double every day, unemployment is more than 90 percent and the currency is almost worthless.
The MDC leader said he was aware the unity government was not an ideal solution.
"We are aware of the shortcomings (of the power-sharing deal), but we are also aware of the potential of responding to the needs of the people. Sceptics must understand why we’ve done this and what’s the best course of action to pull this country from the precipice," Tsvangirai said.
Analysts believe Mugabe and Tsvangirai, two old foes faced with the prospect of working together, will appoint political allies rather than technocrats and economists who might have better qualifications for rebuilding the ruined country.
Appointing Biti, a lawyer and founding MDC member who fiercely opposed compromise with Mugabe, to the finance ministry could reinforce that view.
It also raises the risk of confrontation between him and Central Bank Governor Gideon Gono, a Mugabe ally.
"But of course he would have to work with Gono as Reserve Bank governor, and that is probably going to be his major challenge," said Susan Booysen, political analyst at the University of the Witwatersrand.
"It is really going to take everything for him to show his mettle and to have a very good strategy to work out these obstacles," Booysen said, adding:
"He is a highly qualified person, he is politically very astute, and if he makes a success of this post, then it could actually stand the MDC in very good stead in future campaigns and making an impression on people."
Biti’s only experience of economics was serving as the opposition party’s secretary of economic affairs.