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THE Minister of Finance and Economic Development, Professor Mthuli Ncube, last week released the 2018 Fourth Quarter Treasury Bulletin which contained a number of achievements notched by the Government as it accelerates implementation of its short term economic blueprint — the Transitional Stabilisation Programme and other austerity measures announced in the National Budget.
In it, the Minister acknowledged the prevailing challenges bedevilling the economy which have manifested in price hikes and other upheavals which are symptomatic of reforms currently being implemented to put the country back on track. Professor Ncube emphasised that the effects of the reforms are painful but temporary as they will soon come to pass with a new stable and prosperous Zimbabwe on the horizon.
What is critical is for all Zimbabweans to buy into the reform programme and support efforts by Treasury to extricate the country from the quagmire it found itself in when Operation Restore Legacy was rolled out in November 2017.
Prof Ncube is not a miracle worker but credit must go where it’s due. In the short period he has been at the helm of Treasury, he has recorded evident successes in fiscal consolidation and discipline, removed various pricing distortions, instituted far reaching monetary sector and currency reforms, rehabilitated key infrastructure, and enhanced the Ease of Doing Business.
Economic growth, which could have declined by much higher margins, was saved and is now estimated at 4 percent for 2018, only slightly behind the ambitious target of 4,5 percent. Prof Ncube and his team have tamed the budget deficit by reining in profligate Government spending and ensuring that line Ministries and other departments live within their means.
Performance of public finances has started improving with budget deficits being contained from October 2018. By December 2018, an incredible budget surplus was recorded.
Meanwhile, revenue collections during the fourth quarter of 2018 stood at US$1,69 billion, surpassing the set target of US$1,18 billion by a massive 43 percent. This fourth quarter performance also represented a phenomenal 60 percent increase from the collections of US$1,06 billion recorded during the same period in 2017.
Similarly, fourth quarter revenues surpassed third quarter revenues of US$1,3 billion by 31 percent, reflecting high inflation impact, as well as the introduction of the Intermediated Money Transfer Tax (IMTT) in November.
These are notable gains notwithstanding other exogenous factors which retard progress. For instance, Zimbabwe is still under sanctions and this restricts access to international markets and finance. Foreign currency is in short supply and the country is recovering from the effects of drought and Cyclone Idai which chewed a chunk of the money saved through austerity measures and raised through the IMTT.
Reforms take time to kick in and we understand Prof Ncube’s frustration with some of the impediments he faces as he forges ahead with the painstaking process of turning around Zimbabwe’s economy.
“As Minister of Finance, I often feel frustrated that we don’t live in a perfect world with perfect conditions. So many factors are out of our control; from natural disasters, to global events; from oil prices to the outbreak of disease. We are also in a democracy with lots of decision-makers. We operate in bureaucracies which take time for the wheels to turn,” he wrote in a foreword to the 4th Quarter Bulletin.
“Yet we have a challenge on our hands which needs dealing with, and quickly. We are mending an economy which we inherited in dire straits. Even when all the right policies are being implemented; even when all the political will for economic reform is present; even when Zimbabwe is opening up to the world; rebuilding our devastated economy will take time”.
Indeed, the job at hand is enormous but achievable. What is required is the collective efforts of all Zimbabweans, each doing their bit to get the country working again.
The most important thing is that the train of sensible economics is firmly back on the tracks and Zimbabweans must not dwell on the short term effects of austerity measures but look at the long term goals which with a mixture of discipline and patience, will be more money in the pockets, more jobs, and an economy back on its feet.
The crucial thing to do now is to focus and work hard. Expenditure needs to be reined in while the country works on getting the crippling sanctions removed. Economics is a long-term game and we urge Zimbabweans to look at the bigger picture.
As Prof Ncube said, Government is in a process of rebuilding with reforms well and truly underway.
“While too many Zimbabweans still suffer, and while many are still frustrated; with patience and discipline, we will get to the economic Promised Land. Zimbabwe is slowly finding its feet. The journey is long, and it will not be smooth, but we are heading firmly in the right direction,” he said.
We couldn’t have put it better.
Online Reporter