Africa Moyo Deputy News Editor
The Transitional Stabilisation Programme (TSP), which introduced a raft of cost-cutting measures, has helped stabilise the economy and thrust it on a growth trajectory anchored on productivity and job creation.
This was said by Finance and Economic Development Minister Professor Mthuli Ncube yesterday during a post-2020 National Budget breakfast meeting in Harare jointly organised by Zimpapers and ZBC.
Prof Ncube said it was a “miracle” that Government had contained fiscal and current account deficits without external support.
He said belt-tightening measures under the TSP were experienced by both ordinary citizens and Government officials.
“If you think there was no austerity in Government, just ask the Minister of Information (Publicity and Broadcasting Services Monica Mutsvangwa),” said Prof Ncube, while fielding questions which suggested austerity was for ordinary people alone.
“She (Minister Mutsvangwa) still hasn’t received her ministerial car. We are meeting the people of Zimbabwe halfway. This is why you see these results (containing deficits and recording budget surpluses).
“Government finances are in order; they are actually in good hands. I declare, Government finances are in good hands. The deficit is under control. I think we have achieved a miracle; to achieve twin-deficit target without external support, who does this? Only us, without external support.”
Since the introduction of TSP, a short-term economic blueprint that runs from October 2018 to December 2020, the implementation of fiscal consolidation reforms saw consistent monthly Budget surpluses that reached $1,4 billion between January and August this year.
Similarly, the current account delivered a positive balance of US$116,4 million during the first half of the year, which “all pointed to positive signs for restoring the much-needed macro-fiscal stability and elimination of the twin deficits”.
Prof Ncube said he worked hard on external engagement and there was now a “very clear roadmap” on clearing arrears with external financiers.
“We know that clearing those arrears will unlock financial support,” he said.
Prof Ncube said linking prices to the US dollar exchange rate was causing “mayhem on pricing and productivity”.
He said moving out of that practice would not be easy.
“That is exactly what is causing inflation, US dollar price indexing,” said Prof Ncube.
“It’s very difficult to de-dollarise. Very few countries have done this successfully, but we will be very successful in that.
“I think no country has de-dollarised in the last 30 years. Now we will be the test case to de-dollarise. But the trick to completely delink the prices from the US dollar is exchange stability.”
Prof Ncube said keeping the exchange rate stable will help in ensuring that prices were not indexed to the US dollar.
It is expected that the interbank market, which is still in its infancy, will stabilise the forex rate.
The interbank market is still being fine-tuned.