The Confederation of Zimbabwe Industries (CZI) has advised the government to step up austerity measures by enacting a new law, which stipulates a cap on government expenditure.
CZI agreed to come up with an implementation matrix of several congress resolutions within a week, amid reports that many companies were on the verge of collapse due to underfunding, competition from regional peers and Chinese imports and antiquated technology.
Among some of the measures the CZI is lobbying for is widening the multiple currency regime to include the Chinese yuan, as liquidity continues to bite the domestic market.
Concluding an annual congress in Nyanga over the weekend, captains of industry urged the government to craft a Fiscal Responsibility Act, modelled along that of Brazil, in a bid to contain the ballooning of the government’s predominantly recurrent expenditure, largely driven by the wage bill.
The wage bill, which the International Monetary Fund recently described as unsustainable, accounts for 70% of the State’s monthly revenue, leaving Treasury with limited fiscal space.
“CZI declares an economic crisis and measures should immediately be put in place to avert the deepening of the crisis,” reads part of resolutions adopted by the manufacturing sector, which at peak accounted for nearly 25% of the economy. “A Fiscal Responsibility Act, which guides the government on expenditure so as to maintain the necessary fiscal stability, should become a part of our economic management culture.”
The business leaders also agreed to push government to prosecute “those who abuse depositor’s funds to ensure restoration of confidence in the banking sector.”
Representatives of the country’s manufacturing sector also asked the government to expedite the setting up of a National Economic Council as agreed in the Global Political Agreement signed in September 2008.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
In a bid to keep track of the performance of the sector, CZI undertook to provide monthly updates on company closures and state of the industry. The business leaders also agreed to urge the government to formulate a national policy on cluster or value chain initiatives.
The manufacturing sector agreed to embrace self regulation and promote green growth and green labelling as climate change takes the global centre stage.
