FINANCE minister Mthuli Ncube on Wednesday told Senate that Zimbabwe’s future was bright, adding that the economy would witness growth next year despite the severe economic difficulties currently being experienced by citizens.
BY VENERANDA LANGA
Ncube said this as he made another midyear budget and economic review statement in the Senate. Ncube, in his short statement, said he would bring before Parliament a Finance Bill (2020) which proposes that all payments made in foreign currency should be taxed in forex.
“The future is bright — I can see the light and that economic growth will be better next year,” he said.
“We had four crises in 18 months where we suffered some shocks due to the drought which impacted agriculture and electricity generation, as well as COVID-19 but I am optimistic that the future is bright,” he said.
Ncube told senators that inflation was going down, adding that the country had what he called blended inflation — one of which was on the use of the US$ and the other on the use of the ZW$.
“We have allowed for the use of free funds in the market and blended inflation is 450% — which is lower than the ZW$ inflation which is 745%. So, this is helping citizens to lower inflation because someone going to buy goods using the US$ in shops is facing a different level of inflation. We expect month-on-month inflation to go down by 5% by year end.”
Ncube claimed Zimbabwe’s economic growth rate which will contract by minus 4,5% was actually better compared to developed countries whose average would be -8% due to the effects of COVID-19.
“We expect recovery in 2021, and for Zimbabwe we expect +7,4% growth rate in 2021,” Ncube said.
Responding to a question on why shops charging in foreign currency were not being taxed in foreign currency and why companies charging for goods and services in foreign currency were not paying workers in the same currency, Ncube said: “We will soon deal with that issue in the Bill I am bringing before Parliament soon. There is a paragraph which will compel retailers to show receipts in the currency of payment and to pay taxes in the currency they were paid.”
On cash transfers for the vulnerable during COVID-19, Ncube said: “Our target is one million people, but registration is slow. But we want citizens to register because $300 is waiting for them. If you are feeling vulnerable please come forward and register because $2,4 billion is waiting.”