Ncube says economic stabilisation programme next month

FINANCE minister Mthuli Ncube will next month unveil a transitional economic stabilisation programme that will address fiscal and monetary reforms as well as an arrears clearance programme.

BY FIDELITY MHLANGA

Zimbabwe is saddled with fiscal pressures as the public sector spending is chewing above 90% of the country’s revenue, leaving little for social and infrastructure development.

Ncube yesterday met outgoing British Ambassador to Zimbabwe, Catriona Laing, and outlined how the United Kingdom would assist in arrears clearance.

“I also did share with Ambassador Laing that we are working on a transitional economic stabilisation programme that is likely to be operationalised in line with vision 2030,” Ncube said.

“In terms of that vision, we have to undertake certain reforms in terms of fiscal consolidation, (and) arrears clearance. The UK has been a big partner in terms of arrears clearance, supporting us all the way on how to think about it and convening important international meetings here and there, supporting the arrears clearance.”

Zimbabwe is burdened by a debt overhang of over $18 billion accrued from both public and private sector borrowing, resulting in the country sinking deeper into a fiscal quagmire since 2013.

Domestic debt has risen to $10 billion, while external debt stands at $8,5 billion.

Government has been issuing quasi-currency instruments in the form of Treasury Bills currently standing at about $2 billion to fund its domestic requirements.

“The direction on currency reforms is linked with the direction of fiscal reforms,” Ncube said.

“What we are considering is a package. In a sense, the fiscal side is an albatross to the monetary side. So if we are going to have monetary reforms, we are going to have fiscal reforms.

“That is reducing the budget deficit (and) getting it down to a single digit as quickly as we can and adopt a budgeting approach that always take a medium term approach. We must be clear on where we want to go in three years’ time.”

Ncube said he would have to further discuss the issue of arrears at the annual International Monetary Fund (IMF) and World Bank spring meetings in Bali Nusa Dua, Indonesia, taking place between October 12 and 14.

“We don’t have timelines yet, but it’s about options, then steps once the options have been chosen. So there are various options, so we are looking at those options and see what’s workable. But we are on top of this,” he said.

Laing said the spring meetings would be a good opportunity to set out a clear vision on how the country seeks to clear its arrears.

“The IMF and World Bank meetings in Bali will be a very good opportunity to set out the vision on a fiscal and monetary side with the creditors and to see what the timelines will be on clearing the arrears,” she said.

“We recognise that you need support and we are here to provide that support to try and encourage the process on being back to the IMF programme perhaps on an interim staff-monitored programme as soon as possible.

“So we have to start a serious dialogue with the IMF which will unlock what you really need from the international community, that is lines of credit.”

19 Comments

  1. During the election (as regards political legitimacy) and now after the election (for economic recovery), one gets an impression of two major features of this government: a) a lot of talk versus inadequate required action and b) a focus and dependency on forces and determinants outside rather than inside the country. The usual cheer leaders will talk of giving people time but the presidency and two key ministries have already had 9 months under new leadership…

  2. How come Tendai Biti was able to stabilise the situation in a very short space of time during the GNU without all this fancy talk of endless strategies and programs that never work in the end anyway?

    1. Some problems we have now come from that era , Biti created short term solutions to big problems , eg we where running a cash dominated economy , secondly we using currency wc is not ours meaning we have no monetary policy we can do over it. we need long term solutions. paneziya pane dovi

      1. The problems we have are actually a result of a departure from the sound and practical principles pursued during the GNU. ZIMBABWE has no discipline to run a monetary policy of its own, as evidenced by their unruly appetite to print money willy nilly. In failing to cope with sound economics, they resorted to old habits of printing money by smuggling a pseudo currency called the bond note into circulation. Without the bond note, the abitrage scenarios doing ravage to the market would be minimal, if not non existent.

    2. The heart Problem

      it was GNU as you say he was not alone. food for thought

      1. He was in charge of Finance. We eat what we kill was his policy. Excuses upon excuses is the order of the day with these Zanu goons who have absolutely no idea what to do to get everyone out of the shit they created.

    3. truth allow your eyes to see beyond the reach of your shadow!!!! Biti never stabilised anything. He just extended the credit balances. he inherited a loan bal of 8b he left it at 15bn he never created any thing that fuck

  3. Bla bla bla bla bla bla chabuda hapana. Whats needed is action not words. You can talk and talk and talk but the truth is, A BLACK PERSON CAN NOT DO ANYTHING MEANINGFUL. THIS CURRENT MIN IS JUST LOOKING FOR A CHANCE TO LOOT AND KEEP ON DISHING THE PROMISES. VERY SOON WE WILL BE IN 2023 WITHOUT ANYTHING MEANINGFUL DONE. SHAME.

  4. Some problems we have now come from that era , Biti created short term solutions to big problems , eg we where running a cash dominated economy , secondly we using currency wc is not ours meaning we have no monetary policy we can do over it. we need long term solutions. paneziya pane dovi

    1. POLITICAL PROPHETS

      good analysis, but i think Biti’s policies were supposed long term policies which were actually conflicting with zanu pf looting policies…..why did the 15billion vanish when BTTI was out of office, no money was not accounted for in Biti’s era, we need a person who guards our national purse strictly every cent must be accounted for and must be used effectively, efficiently and economically, thats the value for money principle which Biti employed, its not an issue of currency Zambia used the USD dollar till they came back to their feet but Zimbos made it disappear instead, we are a disgrace as a nation, we have a stunning record of corruption guys we have to admit. What was shortcut was the introduction of the bond note project…..

  5. Our problems are way beyond tinkering with fiscal and monetary reforms, we have destroyed prime industries through high taxation and hostile policies,skilled people have emigrated,our markets have evaporated and nobody trusts us.

  6. dofo rakadzidza biti aita sei kana usina zvekutaura nyarara

  7. This Mthuli chap seems to be punching above his weight. He seems to have no clue about how to solve Zim economic problems. Apparently, he needs time to read some Economics textbooks to come up with a “solution”. Zimbos must closely watch Mthuli he could be a conman.

  8. ok Mr Ncube, lets push, I know you will achieve.

  9. murikunonoka mukuru

    1. wait and see reality will,don to everyone whether Zanu pf or MDC or ZBCor Herald propaganda , we can falsify everything not the economy, the effect will come to all, the cheater and the cheated, good talks will not change the economy, neither promises but , the looters are safe but the looted will suffer.The looters cheers you up when you are falling.They did it to the demise of Mugabe and yesterday they were cheering,Mr Ncube must seek advise from non partisans Zimbos,not partisans looters who control the money changers,who trieve in the failure of the economy

  10. Your Name (required):Special Black

    During Biti’s era, USdollar was coming from chiyadzwa,goods were being imported from neibouring countries duty free esp groceries. This was killing local industries. Civil servants were getting allowances not salaries. Now the USD was mopped by clever forex dealers fm neibouring countries and gold buyers. Now, SI64 will revive local industries. We cannot match Biti with M Ncube, Biti is far, far below. Let the most qualified do what they know best. The world over may lough at you if you choose Biti.

  11. ZANU pf does not have the brains and the will power to tackle our problems.The solution is to recall the bond note and reintroduce the multi currency regime that prevailed during the GNU.Ofcourse this is only a truce in our war but it should be able to give us a temporary lull against inflation and money supply issues while we grapple with bloated government expenditure and balance of payments.otherwise I don”t see us succeeding our this regime .

  12. Your Name (required)Special Black

    In order to curb forex leakages, all gold ore milling companies should have Fidelity printers staff recording and buying gold, USdollar must only find its way to reserve bank, ministry of agric should start engaging DDF to drill bore holes at every plot, and const dams for irrigation. dairy farms and cattle ranges should be revived. anoda kuvata must go to hosp. each area must have its agric specifications.

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