Zimbabwe Finance Minister happy with reforms progress

Prof Mthuli Ncube

FINANCE and Economic Development Minister, Professor Mthuli Ncube, has expressed satisfaction with progress made in the economic reform process and the performance of the interbank market to date.

Officiating at the recent Confederation of Zimbabwe Industries (CZI) congress and International Investment Forum here, Prof Ncube defended the recent elimination of the multicurrency system saying it was necessary as the economy had performed below its potential. He said the Second Republic was implementing reforms to uplift the country.

“To facilitate the revival of the local industry, Government has developed a new national development policy supported by a local content strategy to develop the manufacturing industry into a modern and diversified sector,” he said.

“Zimbabwe is currently ranked 155 out of 190 economies in the ease of doing business index, which is why we embarked on the ease of doing business reforms to improve the investment climate and business operations in an effort to reduce bottlenecks in the economy that are impeding economic growth and investment.

“I am pleased to inform that milestones have so far been achieved since the inception of these reforms in areas such as credit registry, enforcement of contracts, insolvency law and public procurement among others.”

Prof Ncube said the interbank market was now functional and has constrained activities of the parallel market. He said Government was now fine tuning the foreign currency market to enhance its efficiency and reduce variations across the banking sector. This is expected to see more bureaux de change being licensed to enhance foreign currency mobilisation from the market.

The local currency is set to start appreciating once the market becomes more efficient, said Prof Ncube.

He said Government remains concerned about the unjustified price increases and the three tier pricing structure in the market and urged business to exercise restraint and avoid rent seeking behaviour.

Prof Ncube said between January and May 2019, Treasury recorded surplus amounting to $644,1 million from its revenue inflows. He, however, said the country remains in debt distress with huge external arrears, which prevents financing from the international financiers and limit access to foreign direct investment.

The minister said Government was impressed by the performance of the Staff Monitored Programme (SMP), which targets to clear arrears and unlock new lines of credit in various forms some of which will be private equity and possible revolving funds with local financial institutions. A successful reform process will result in a triumphant SMP (March 15 2019-15 March 2020), said Prof Ncube. He reiterated that there will not be any further surprises on the policy front in terms of major policy pronouncements as Government is now moving towards implementation stage.

“Government is now seized with the task of further consolidating, reinforcing and supporting pronounced policies both on the monetary and fiscal front with a view of ensuring that the gains achieved thus far are not lost,” he said.

The minister said the industrial sector is key to recovery of Zimbabwean economy as it provides employment in the small and large scale business, hence the need for partnership with Government.

“Resuscitation of the manufacturing sector is imperative and production and productivity is the cornerstone for growth of any economy,” Prof Ncube said.

He said the conference theme: “Towards a market-led economy: addressing impediments to industrial development,” resonated well with Government thrust of achieving Vision 2030.

Prof Ncube said the private sector was expected to become the engine for growth with Government playing the facilitative role of implementing conducive policies and provision of infrastructure that promotes growth and development.

He said Government was cognisant of the numerous operating challenges industry is facing including electricity, fuel, and foreign currency shortages, saying measures are being worked on to redress the situation.

Source – chronicle