Finance minister calls for patience

Finance minister Mthuli Ncube says the country should give his austerity measures a chance as they seek to stabilize the economy.

Zimbabwe is facing its worst ever economic crisis in a decade characterized by foreign currency shortages, resulting in fuel and food shortages, rising consumer prices and high unemployment among other things.

Since his appointment last year, Ncube has introduced various austerity measures including the controversial two percent tax, salary cuts for civil servants and ordering import duty for vehicles and other goods be paid in foreign currency.

However, his measures — though well meant — have found little on or no backing from crisis-weary Zimbabweans.

With his back on the wall, Ncube yesterday said people’s resistance to his moves were due to lack of proper communication from the government about its 2030 vision.

“The starting point for our journey is stabilization. Aware of the difficult reality in which we are operating, the first step is to stabilize the economy to provide a solid foundation for sustainable economic growth,” the Treasury boss said.

He added that there was a need for bold and tougher decisions to deal with the twin challenges of budget and trade deficit.

“The main focus, therefore, is on the need to urgently correct the mismanagement of the budget. For years, the government has been spending much more than it had, which destabilized the economy. Simply put, when we came to this office, our national wallet was empty and we had significant debt.

Our strategy is to cut down government spending — through eradicating unnecessary expenses and waste — while widening the income base. We can no longer spend what we do not have,” he said.

Under his Transitional Stabilisation Programme (TSP), which was introduced in October last year, the government made a commitment to reduce expenditure to make room for developmental projects and programmes which support production.

This also includes the privatization and reform of inefficient parastatals to increase their contribution to the economic development of the country, and reduce their drain on the government.

The Oxford-trained academic noted that cutting spending and increasing taxes are not popular measures, and they are not pain-free.

“Many people are struggling and we are aware that we are asking for increased patience, understanding and sacrifice at an already difficult time. But this is the only way. The TSP is like a doctor performing life-saving surgery on the Zimbabwean economy. Yes, the surgery will cause pain, but this pain is the first step towards recovery,” he added.

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