We are done with major macro-economic reforms – Zim Finance Minister
Zimbabwe is turning its focus to issues that drive growth and development of its economy as the government has concluded implementing major macro-economic reforms which now just need fine-tuning, Finance and Economic Development Minister, Mthuli Ncube said on Monday.
Two weeks ago, the government took the market by surprise by re-instating the Zimbabwe dollar as the country’s sole currency and banning the use of multi-currencies, primarily the United States dollar on the local market.
Multi-currencies had been officially in use for 10 years.
Professor Ncube told business leaders at a meeting to discuss the implications of the return of the local currency, that major government decisions implemented in the past year were leading towards re-introduction of the Zimbabwean dollar.
“In my view, in terms of macro-economic reforms, I think we are done now. In terms of fiscal, monetary reform, we will continue to fine tune but we are done,” he said.
“I cannot think of any other major macro-economic reforms that are left.”
Prof Ncube said the separation of foreign currency accounts from local accounts last year, the introduction of new fuel pricing system in January this year and subsequent introduction of a foreign currency exchange inter-bank market were also progressive steps towards the re-introduction of a local currency.
He admitted, however, that government had to re-introduce the local tender earlier than scheduled as the market was rapidly re-dollarising which put more pressure on the authorities.
“Re-dollarisation required conversion of salaries to US dollars. Given the tight fiscal space and that we do not print US dollars, we would not be able to do that,” he said.
“That is one of the reasons why we thought we should move faster on the introduction of the Zim dollar, not that it was not on the cards but we had to move faster.”
Other initiatives to aid the performance of government such as parastatal and state enterprises reform were still on-going, he said.
But with major reforms concluded, the government will focus its energies on growth and development in line with Vision 2030, he said.
President Emmerson Mnangagwa is aiming to have Zimbabwe upgraded to an upper-middle-class economy in the next decade.
Only last week, the World Bank confirmed that it had upgraded the country to a lower-middle income country from a low-income economy.
“We are making progress,” said Professor Ncube.
“It’s not lost to me, the steep climb we have to make towards Vision 2030, in terms of being an upper middle-income country.
That is quite a steep climb indeed but we are ready for it and are working towards that.”
He said Zimbabwe would ideally require an average annual growth rate of no less than six percent until 2030 to hit the target.
Meanwhile, business leaders that attended the meeting called on the government to work on re-building confidence as well as consistency for any of its programmes to succeed while criticizing the ambush way the local currency was re-introduced.