Harare (New Ziana) – The government said on Tuesday the painful phase of its economic reforms is nearing the end, with the economy now solidly primed for sustained growth.
Through the Transitional Stabilisation Programme, Zimbabwe is implementing a raft of reforms aimed at providing a base for future economic growth.
Some of the reforms implemented so far include scrapping the use of the multi-currency system and re-introducing the Zimbabwe dollar which trades freely on the inter-bank market.
The government has also been implementing painful austerity measures which it insists were necessary to re-align government expenditure with revenues.
Finance and Economic Development Minister professor Mthuli Ncube said part of the economic recovery plan, the austerity period, was now over as it had achieved its targets.
Some of the targets included reducing the budget and current account deficits and also reducing reliance on Reserve Bank overdraft window.
“Austerity measures are over in terms of our strategy. 2019 was a year of austerity for prosperity we have achieved what we wanted to achieve,” he told a post Cabinet briefing.
“So we have achieved what austerity set out to do. Because now we have put systems in place we are comfortable that we can move forward and transition to productivity and growth, transition to job creation, transition to competitiveness. We are teeing up for the end of next year, we should have developed a draft of the first five year plan, post December 2020.
“So we are very clear on the roadmap, very clear, so austerity is over and productivity is on, growth is on, we need to create jobs especially for the youth.”
Ncube said further reforms meant to improve the ease of doing business, debt arrears clearance and restoring confidence in the financial services sector would be pursued.
He said although government would keep levying the unpopular two percent tax on electronic transactions, It was looking at ways to cushion citizens from hefty taxes.
“I have always maintained that one of the reasons why we introduced it was not just to deal with the informality of our economy, the 60 percent informality, the compliance of those operating in the sector but also those who are formal they still owe the government $3 billion and we have been struggling to collect that money they owe. That two percent tax stays, it is very efficient, we know how much we collect on a daily basis.
“So we are looking perhaps to find other areas we could cut, where we have less of a compliance problem so that we could cut and bring relief to consumers, citizens as well as corporate so we are looking at those areas in the budget but we have not reached a conclusion yet with where exactly we should cut, so we will look to cut but not on the two percent tax,” he said.
Commenting on the impending introduction of new notes into circulation, Ncube said the decision was made in order to deal with cash shortages.
“When we introduce these new notes our approach is to swap RTGS for physical cash so as not to increase the amount of money in circulation.”
Meanwhile, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said Cabinet had been briefed on the second phase of the implementation of the ease of doing business reforms.
She said the reforms were based on the 10 World Bank ease of doing business indexes namely, starting a business, access to electricity and other public utilities, registering property, access to credit and protection of minority investors.
“Cabinet noted with satisfaction that to date His Excellency the President has accented to 8 of the 16 pieces of legislation which required consequential amendment or alignment, for instance four commercial courts have been established in the country’s major cities,” she said.
“To give due prominence to the reforms Cabinet agreed to set up an inter-ministerial taskforce of key line ministries to superintend the ease of doing business reform programme in order to transform our country’s business environment, to promote local and foreign investment, to create wealth and jobs and improve overall economic performance.”
Under the “Zimbabwe is open for business” mantra, the government is speeding up reforms to create a more welcoming and conducive environment for investments to flow in and flourish.
One of the biggest changes made by the government was scrapping the indigenisation law which had been cited as a hindrance to foreign investment.