IMF warns Zim govt

HARARE - The International Monetary Fund (IMF) has warned President Robert Mugabe’s government against interfering with Treasury operations.

IMF local representative, Christian Beddies, yesterday told the businessdaily that government was not giving Finance minister Patrick Chinamasa enough room to implement “sound reforms” to revive the economy.

“… We have seen it happen in the past, the minister proposes something and it gets shot down. Not only does this give the impression that the country as a whole is confused, it also points to a deep rooted problem that the man is being prevented from doing his job…,” he said.

Beddies noted that Chinamasa was the right man for the job and had the requisite skills to rescue the country’s ailing economy — which has since slid into recession for the first time in eight years.

“His policies are quite sound, they just need to be implemented. They need to let the minister do his job,” Beddies said, on the sidelines of the Zimbabwe National Chamber of Commerce annual economic review meeting in the capital.

His remarks came after budget master, in his mid-term fiscal review statement, proposed that government forego civil servants’ bonuses for the next two years and shed government’s workforce.

While the move was hailed by critics and described as “long-overdue” Mugabe, through Information minister Chris Mushowe, rubbished the recommendations days after the announcement. This was not the first time the president rubbished Chinamasa’s crucial civil service reforms.

The Treasury chief’s prescription for sustainable expenditure included taxing civil servants allowances with effect from October, along with a rationalisation of the county’s foreign service missions.

Zimbabwe — presently drowning in a $623,2 million budget deficit as of June 30 against an annual projection of $150 million — is targeting to save $155 million by the end of 2017 after axing 25 000 workers.

According to Chinamasa, the bonus cut was to translate into savings of around $180 million per annum.

However, even after implementing all these measures, the monthly wage bill was still going to remain high at $245 million, which is 76 percent of revenue.

Baddies pointed out that while initially pegged at 2,7 percent then slashed to 1,4 percent, Zimbabwe’s economic growth, could rebound back into positive territory if Chinamasa carried through with various proposed reforms.

“I cannot really say that the country is now in recession because it is difficult to project how the Zimbabwe economy turns out in future, it is funny really, because if sound reforms are implemented, growth will definitely be recorded,” the IMF representative said.

Chinamasa, who presented the 2017 national budget yesterday, is on record warning that failure to contain Zimbabwe’s budget deficit would worsen the deficit to an estimated year-end level of over ?$1 billion.

The country’s first half revenue collections stood at $1,8 billion which was 9,8 percent below target and with expenditure standing at $2,3 billion against a target of $2 billion — government had overshot budget by $308,4 million, with ?the huge wage bill causing the overshot.

For years, government has been advised to “live within its means” with the IMF through its Staff Monitored Programme recommending that Chinamasa cut government’s wage bill to at least 50 percent of all total collections.

Zimbabwe has been struggling to meet its $3,7 billion revenue targets for the past three years due to massive company closures and a high unemployment rate worsened by deteriorating economic conditions and lack of key reforms, with Beddies warning that if government continues to “suffocate” Chinamasa the situation will get worse in 2017.

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