HARARE – Government is satisfied with progress it has made in implementing fiscal reforms meant to address economic challenges the country is facing, a Cabinet Minister has said.
The Zimbabwean economy went through a vicious cycle in the decade ending 2008, which only came to a halt at the adoption of multiple foreign currencies in 2009.
The economy, however continues to face obstacles due to various internal and external factors.
But, the government has committed itself to an economic reform process which includes reducing the wage bill, increasing industrial and agricultural production and improving the ease and cost of doing business.
Finance and Economic Development Minister Patrick Chinamasa expressed confidence of meeting set economic reform targets.
“Any reform process is not an easy process, first it is a process not an event and as such I am very pleased with the progress that we have made in addressing fiscal reforms,” he said.
On the wage bill, Chinamasa said he was also confident of reducing it from the current 90 percent of revenue to about 55 percent by 2019.
“When we are talking about the wage bill I have indicated on several platforms that we have two avenues to address the wage bill, one is rationalisation measures, the other is to grow the cake, if we increase the cake the wage bill will take its right proportion within a bigger cake, so those are the two avenues that we are pursuing and I am pleased with the progress that we have made in that front.”
Last year, Zimbabwe successfully completed an International Monetary Fund (IMF) Staff Monitored Program (SMP), a reform plan Harare undertook to kick-start normalization of ties with the bank.
Under the SMP, Zimbabwe committed to undertaking several reforms such as clarifying the indigenization program and restoring confidence in the financial services sector.
Other measures being pursued by Zimbabwe to help grow the economy include an arrears clearance plan, dubbed the Lima plan, which was agreed to in October 2015 in Peru, by the IMF, World Bank and the AfDB.
So far, Zimbabwe has cleared arrears owed to the IMF and is now working on clearing arrears owed to the AfDB and the World Bank to unlock fresh funding. – New Ziana