Prominent economist and former MDC executive member, Eddie Cross (pictured), has urged the new Finance Minister, Mthuli Ncube, to grow a thick skin and resist executive pressure to push him to spend more than what the country was producing.
BY FIDELITY MHLANGA
Speaking at an Alpha Media Holdings (AMH) conversations titled “Jump starting Zimbabwe’s Economy – What are the Building Blocks?”, Cross said Ncube’s top priority should be addressing the fiscal deficit.
“It (fiscal deficit) has been running at $300 million per month and that is not sustainable. That could lead to the printing of money and by end of this year, if we are not going to do anything, we are back into hyperinflation,” he said.
“To address the fiscal deficit, we have to look at increasing revenue, which means higher taxes. I think the new minister must dictate to the Cabinet what he is going to do.”
Cross said there was need for an independent monetary authority to take control and bring the Reserve Bank of Zimbabwe to a solid position.
“Exchange control is not working. We are taking productive assets from our exporters to non-productive areas. You can’t ignore the market. I don’t think Ncube will do that. He is a clever guy. He is one of the clever minds in the world. We could be lucky to have him,” he said.
Cross credited former Finance minister Tendai Biti for containing the budget deficit by way of controlling government expenditure during the days of the Government of National Unity.
He added that the rule of law, respect of property rights, holistic reforms and international engagement were key to end the crisis in the country.
Zimbabwe National Chamber of Commerce chief executive officer, Christopher Mugaga, said the appointment of new faces in Cabinet was a welcome development, adding their success hinged on listening to various stakeholders on the ground.
Another economist, Ashok Chakravarti, said there was need to liberalise and legalise foreign exchange.
“We should start looking at addressing foreign exchange management system. This does not necessarily involve bringing in the Zimdollar or taking in the hard decisions, but finding out to what extent can the trading and foreign exchange be legalised and liberalised,” he said.