Minister of Finance and Economic Development Professor Mthuli Ncube has created some fiscal measures to restore macroeconomic stability in Zimbabwe. Ntuli says these fiscal measures were done “in order to complement and support the Monetary Policy measures” announced by the Reserve Bank of Zimbabwe (RBZ). The following is a summary of the measures that the Finance Minister has tabled to create a stable macroeconomic environment for Zimbabwe.
1. Financing of the Deficit
The Government will limit the central bank overdraft facility and curtail RBZ advances in line with Section 11(1) of the Reserve Bank Act [Chapter 22:15], which states that borrowing from the Reserve Bank shall not exceed 20% of the previous year’s Government revenues at any given point. The Treasury will seek to finance Government’s vital socio-economic development programmes by use of instruments that “crowd in” the private sector, including public-private partnerships or Government guarantees to financial institutions.
2. Infrastructure Bonds
The Government will encourage the issuance of publicly traded infrastructure bonds in order to crowd in the private sector and diaspora participation in the national infrastructure programmes.
3. Reforms of State-Owned Enterprises
The government is ranking State-Owned Enterprises to accelerate privatisation scale on high ranking state enterprises. Ntuli said this will improve the enterprises’ viability and strengthen the public-private partnership.
4. External Debt Arrears Resolution
Treasury is in dialogue with international financial institutions to clear US$2.5 billion owed to African Development Bank, World Bank and the European Investment Bank and engaging Paris Club on restructuring the US$2.8 billion credit.
5. Fuel Market
Zimbabwe to create a Regional Fuel Dry Port out of the Mabvuku Loading Gantry and Msasa Depot fuel storage facilities. An additional pipeline could also be built from Beira to the fuel storage facility in order to increase capacity.
6. Revenue Collection Measures
The Finance Minister reviewed the Intermediated Money Transfer Tax from 5 cents per transaction to 2 cents per dollar transacted.
7. Effectiveness and Efficiency in Revenue Collection
On 1 October Ntuli terminated the term of the ZIMRA board and claims to have proposed names of the new Board members which are being cleared.
8. International Financial Institutions and Partners
Treasury to accelerate cooperation with international financial institutions and bilateral partners, and other international organisations in pursuing international reengagement.