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Govt admits policy failures

GOVERNMENT has conceded that it was found wanting in the implementation of previous economic blueprints and now pins its hopes on its ambitious National Development Strategy 1 (NDS1) to cure the current economic ills.


GOVERNMENT has conceded that it was found wanting in the implementation of previous economic blueprints and now pins its hopes on its ambitious National Development Strategy 1 (NDS1) to cure the current economic ills.

The NDS1 is the second blueprint launched by President Emmerson Mnangagwa’s administration, following in the footsteps of the Transitional Stabilisation Programme (TSP), which was launched in 2018 to run for two years but fell flat.

Zimbabwe has in the last three decades launched several economic recovery plans which missed their targets due to failure by authorities to implement reforms and keep expenditure within budget.

But the southern African nation is in the throes of its worst economic crisis in more than a decade underpinned by the continuing collapse of its Zimdollar on the more representative parallel market.

Its economic plight was made worse by the outbreak of the coronavirus that caused lockdowns which resulted in companies shedding jobs in an effort to stay afloat.

However, speaking during the post-Cabinet briefing yesterday, Information minister Monica Mutsvangwa said NDS1 was the magic wand to steer the economy on a growth trajectory and stabilise the exchange rate.

Critics say the authorities are maintaining an artificial exchange rate of $84,70 to the greenback while trading at $140 on the verdant black market.

“Noting that previous economic blueprints, albeit with similar targets, have fallen short on implementation, NDS 1 is premised on the need for bold and transformative measures that will ensure achievement of the country’s vision of an empowered and prosperous upper middle-income society by 2030,” Mutsvangwa said.

“This framework is set to steer the economy on a growth trajectory averaging 5%, supported by a sustainable annual fiscal deficit target of around 1,2% of GDP [gross domestic product], exchange rate stability and single digit inflation.”

Mutsvangwa said government would do away with “unmitigated and unbudgeted subsidies” as they undermined fiscal consolidation objectives under the new policy.

“The nation is informed that consistent with the overarching goal of the National Development Strategy 1:2021-2025 (NDS 1), it has become necessary that a guiding framework with regard to subsidies be established,” she said.

“Such a framework should ensure subsidies meet a specific public policy objective to remedy an identified market failure and are of the minimum size, necessary to achieve such an objective.”

Zimbabwe’s agricultural sector is heavily dependent on subsidies.

Currently, government is financing several programmes in the agricultural sector, including farm mechanisation, inputs and selling price support for crops such as maize, soyabeans, cotton and wheat.

“Subsidies that are being provided will have explicit identified funding sources, with costs adequately quantified to determine fiscal sustainability,” Mutsvangwa said.

On COVID-19, Cabinet said the pandemic was still wreaking havoc across the country and urged the public to remain vigilant.

On the B.1.617 variant which is prevalent in India and was detected in a localised outbreak in Kwekwe, she said government had put up stricter measures to address the problem.

“Going forward, implementation focus will be directed towards high-impact targets that will transform the livelihoods of the citizenry guided by careful identification of the measurement criteria for targets and outcomes … Cabinet considered a report on the Tripartite Negotiating Forum meeting which was held on April 22, 2021 as presented by the Minister of Public Service, Labour and Social Welfare.”

On civil servants’ salaries engagement, she said: “The nation is advised that government emphasised the need to strengthen the sectoral determination of salaries and wages through NECs [national employment councils] as well as maintain the stability of the economy and the prevailing foreign currency auction system.”

Mutsvangwa also said Cabinet considered and approved the proposed engagement of a private partner in the implementation of a national biometric database for the production of e-passports, national identity cards and birth certificates.

“The partnership will increase the passport production capacity to four million units per year, resulting not only in the clearance of the current backlog, but also meeting the daily demand and enabling the country’s embassies to issue passports to Zimbabwean citizens abroad.”

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