Austerity measures to go next year: Ncube

BY MTHANDAZO NYONI

AUSTERITY measures introduced by government this year will be over by next year when the country starts experiencing economic growth, Finance and Economic Development minister Mthuli Ncube has said.

In addition to the cost-cutting measures, Ncube introduced a 2% tax on intermediated financial transactions to shore up government coffers, leaving an already overtaxed citizenry hard pressed.

Speaking at the Zimbabwe International Business Conference held in Bulawayo yesterday, Ncube said the austerity measures could not be run for a long time.

“We need to go through some period of austerity, but build towards prosperity and I tell you that next year you will hear me use the word austerity less and less because we will start entering prosperity,” Ncube said.

“I think I will limit austerity just to one year and then we move to prosperity towards 2023. But quite clearly, you can’t do austerity for three years; it’s a bad idea. One year, get it right and move on”.

He said government was doing well on the fiscus side.

“The government is solvent. We are running surpluses and we have been doing an average surplus of a $100 million a month since September last year,” he said.

“This year alone, in January, we had a surplus of $102 million. In February we had a surplus of $85,5 million (and) in March our surplus would be double that.
It will be just above $200 million. Money supply is not growing. So where is the pressure on the exchange rate coming from?”

He said the pressure was coming from speculation, which is bad for the economy.

Ncube also pleaded with industry to make use of the interbank market, saying as government they were making sure that economic fundamentals were put in place.

5 Comments

  1. Even if Mthuli is given 60 years he will never fix this economy with the bookish ideas which will remain bookish for ever. He remains burying his head in the sand pretending that that the USD: RGTS is at !:3.50 when it’s escalating by the ticking of the clock. Zuro riya aiti iri pa 1:1 iyo iri pa 1:3. When he introduced the so called Inter bank Rate he said it was 1:2:5 when it was never there. He does not see the rising prices of bread as anything to worry about. Who is a criminal around the President? Kungobvunzawo hangu.

  2. haa minister munehutsinyeeee

  3. Currency instability is a function of an under-performing economy. As long a the country is not producing and exporting to generate the much needed foreign currency, that stability will not be guaranteed. It is not fair to point out that speculation is causing the exchange rate to shoot up on the alternative market. Rather, the country has a short supply of foreign currency, hence demand exceeds supply leading to the current exchange rate prevailing in the economy.

    Celebrating budget surpluses that are brought about by taxing more to the general citizens is not the best way to do it. The government itself should reduce its expenditure which is putting huge pressure on the wage bill. The minister should talk more on the expenditure cutting measures and clearly outline how much has been saved to date as a result of fiscal consolidation. The budget surpluses currently being witnessed will not be sustained in the long run if the government does not cut on its expenditure. Cutting expenditure involves opportunity costs .

  4. THIS MNTHULI NCUBE IS THE MOST STUP!D AND USELESS FINANCE EVER TO COME OUT OF ZANU. YOU ARE AN IMBECILE MR NCUBE. YOU KNOW NOTHING PRACTICALLY. YOUR BARBICAN BUSINESS FAILED AND YOU HAVE THE TEMERITY AND AUDACITY TO LEAD THE FINANCE MINISTRY. TENDAI BITI UNDER TSVANGISON DID NOT TAKE HIM DAYS TO MAKE THE ECONOMY TICK. WHO KNOWS, MAYBE YOU ARE BUSY EXTERNALISING THE FOREX. YOU NEED TO BE PROBED B4 YOU RUN AWAY.

  5. Mthuli is lost;he is taking the same route used by the famous Bernard Chidzero during ESAP period 1991-1997.The result was division in government, the ruling party and in communities Poverty and desperation scaled dizzy heights.The cost of living skyrocketed.People resorted to going to work on foot.You would be luck to have one meal per day.The bookish economics does not not work for a bleeding economy on its knees such as this.The monthly budget surpluses are meaningless to an economy which is bleeding profusely such as this one.Adopt RAND, zvimwe zvaramba.

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