IMF programmes key for recovery

HARARE - Zimbabwe’s government is grappling with a myriad of problems to try and turnaround the flagging economy.

While it remains a huge challenge to unlock funds and instil confidence for immediate injection of the much-needed cash into the stuttering economy, there is need for government to show discipline.

It is no coincidence that the International Monetary Fund (IMF) team is in Harare on a crucial visit to evaluate the country’s economic policies installed during the four-year tenure of the inclusive government.

The IMF visit is the first since Zanu PF and President Robert Mugabe won the July 31 elections which were marred by allegations of vote-rigging.

It is, therefore, important that during the IMF visit, government assures the Washington-based group of its commitment to live within its means while undertaking to continue with an agreed plan for economic recovery.

Full implementation of the IMF’s Staff Monitored Programme (SMP) will help reduce the country’s indebtedness.

The SMP will also unlock new inflows into the country and also provide direction to execute macro-economic policy, of which signs are there, judging by the work done by former Finance minister Tendai Biti.

Zimbabwe’s external debt is said to be $11 billion while Finance minister Patrick Chinamasa says it is half the reported amount.

Zimbabwe needs to increase financial consolidation, strengthen public financial management, improve transparency in revenue collection in the mining sector and reform tax policy and administration.

Already government has failed to meet its revenue targets — contributing to the delays in the announcement of the 2014 National Budget.

It quite evident that the budget deferment is indicative of revenue shortfalls and the cash squeeze being felt by Chinamasa at Treasury.

Diamond revenue, a source of endless bickering in the then inclusive government owing to allegations of opaque trading and non compliance with remittance instruction by Treasury, has not improved.

This, coupled with company closures, has greatly upped the ante in this high stakes situation which poses serious threats to Zanu PF’s pedigree to improve the livelihoods of the impoverished populace.

About 700 companies in Harare alone have shut down either as a result of chocking debts or non productivity.

Historically, tax contributions by companies in the form of Pay As You Earn (PAYE), contribute significantly to government coffers.

These are tough times that require discipline and the commitment to show the world that Zimbabwe is ready to do business again.

A non-belligerent attitude towards those who can rescue us from this current situation is what we need right now.

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