More stringent measures needed

HARARE - While the International Monetary Fund (IMF) team noted that Zimbabwe has met all end-June 2014 quantitative targets and structural benchmarks under the staff-monitored programme, we still have a long way to go to grow our economy.

The Zanu PF-led government must now lay the ground for a stronger, more inclusive, and lasting economic growth by implementing investor-friendly policies through the removal of ambiguous and controversial regulations such as the Indigenisation law.

We feel that addressing the economic challenges must remain a priority for any government that is serious about improving the welfare of its citizens.

As things currently stand, President Robert Mugabe’s government is busy entangled in a vicious fight over the impending Zanu-PF congress and the political party’s succession wrangle — while the economy is burning unnoticed.

To help jump-start the economy — which has been sliding downhill since Zanu PF controversially won the harmonised elections last year — government must end its global isolation and engage international financial institutions.

This is because the country’s economic growth has slowed down as a result of inadequate financial flows, despite a very favourable agricultural season. This and the depreciation of the South African Rand, have caused a liquidity crunch that has weakened economic activity.

Finance minister Patrick Chinamasa must also ensure that government’s current expenditure is reduced by slashing the government’s bloated wage bill.

There is no way this struggling economy will be able to sustain paying civil servants when all economic indicators are heading south.

Unemployment is high, revenue streams are quickly drying up as companies continue to choke under the harsh economic environment, while deflationary pressures are threatening to settle in full time. 

We strongly agree with the IMF observation that balancing the primary fiscal budget should be a major priority for the nation.

This will send a strong signal that Zimbabwe’s government intends to live within its means.

Moreover, fiscal policy will focus on raising the efficiency and quality of public spending and rebalancing the expenditure mix toward infrastructure and social outlays.

Scarce public resources need to be used appropriately, underscoring the importance of containing pressures on the wage bill, stepping up reforms in the taxation of the mining sector, amending the Public Finance Management and Procurement Acts and approving the Public Debt Management Bill.

Government must also take it upon itself to address the country’s debt challenge by stepping up re-engagement with all creditors with the objective normalising relations.

To this purpose, gathering support to define a strategy for clearing arrears with multilateral institutions is very essential.

 

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