‘Multi-currency system here to stay’ – Mnangagwa

HARARE – President Mnangagwa has said the Government will ensure policy consistency to promote a healthy business operating environment.

“Above all, we in Government must speak with one voice to avoid cross messages which bring confusion and uncertainty. Inconsistent public pronouncements on economic policies create fear, anxiety and despondency amongst our people,” he said.

The President was addressing a gathering of bankers, business people and captains of industry at a breakfast meeting at State House today.

“I am aware, the financial services sector is highly sensitive and thrives on the highest levels of integrity, trust, honest and good corporate governance. These values must be upheld at all times, as they are the bedrock upon which we can be a corrupt-free nation.

“The fear to lose wealth and savings, as happened during the 2008 economic melt-down, is current but unnecessary. I greatly appreciate and understand all your concerns and anxieties. Government is working day and night to stabilise the economy.”

President Mnangagwa said the Government was working to ensure economic stability, and that the multicurrency system was here to stay.
He said RTGS (real time gross settlement) balances and bond notes were secure as monetary instruments.

“Whilst the country is going through difficult times mainly because of lack of foreign currency to meet the growing demand for exchange across all the sectors of the economy, I would like to assure you all that the current multicurrency system of exchange is here to stay.

“All your RTGS balances at banks and bond notes in circulation are safe and secure. Safe and secure as legal instruments.
“There should be no pressure to exchange or to offload these balances as Government policy has not changed to warrant such anxiety,” he said.

Meanwhile, in another report, Zimbabwe’s budget deficit will more than double to 11.1 percent of gross domestic product this year from an initial forecast of 5 percent due to runaway government spending, a senior treasury official said on Monday.

President Emmerson Mnangagwa’s government cranked up spending by increasing public sector salaries and purchasing farming inputs for rural farmers ahead of a disputed July 31 presidential election.

The southern African nation is facing an acute shortage of dollars that has stifled imports and sent prices soaring.

George Guvamatanga, the top civil servant at the finance ministry said the government planned to reduce spending by, among other measures, cutting its wage bill by $330 million between 2019 and 2020.

“A double digit budget deficit Mr Chairman is not sustainable,” Guvamatanga told a parliamentary committee.

Guvamatanga said government revenues were set to rise to $5.7 billion this year compared with an initial projection of $5 billion. The figure would rise to $6.4 billion next year, Guvamatanga said, adding this showed the economy was performing.

Zimbabwe’s statistics agency this month rebased some of its economic statistics, in an unexpected move that increased the nominal size of the struggling economy by more than 40 percent.