THE African Development Bank (AfDB) believes the economy will continue to improve if Government successfully implements macro-economic policies.
In an interview on Wednesday at Kopa Business Centre in Chimanimani during the bank’s tour of areas hit by Cyclone Idai, AfDB executive director Mr Mbuyamu Matungulu said the Minister of Finance and Economic Development and the Reserve Bank of Zimbabwe were fully aware of what needed to be addressed.
“It is our hope that this visit will contribute to the strengthening of the resolve of the country in the implementation of the policies that are needed to address the extremely difficult macro-economic situation that the country is facing. The good thing is that we got a good understanding of what the problems are during our discussions with the Minister of Finance and other authorities including the Central Bank,” said Mr Matungulu.
“What we have seen is willingness to implement the policies that would translate into good results particularly with regards to stabilisation, bringing exchange rate and inflation under control as well.
“I think what is interesting is that some of the numbers that are now becoming available particularly with inflation seem to indicate that the efforts are beginning to bear fruit with inflation in January around about two percent which is much lower than the target Government had set for itself of 5 percent on a monthly basis.”
Mr Matungulu said with such kind of results the bank is encouraged to offer support.
“This is sought of the kind of results that we want to see even more of and I would like to also remind your readers that even though it is going to take some doing for the bank to scale up significantly its interventions here, we are already present and doing a lot by way of technical assistance and provision to the Government of financial support when disaster strikes as has been the case recently.
“The objective and our ambition as a bank is to be able to do much more and the hope is that everything will fall into place in the coming months so that we are able to move expeditious in that direction,” he said.
Mr Matungulu said Zimbabwe’s major challenge was stabilising the economy and stimulating domestic and global confidence.
“The most important challenge is that of stabilising the macro-economic framework, bringing the exchange rate under control The good thing is that when you talk to the Minister of Finance, to the Governor of the Central Bank, there is perfect clarity on that front.
“We know that stabilising currency has ramifications into many areas of policy — including the capacity to keep the budget under control,” he added.
Mr Matungulu urged Government to stay on the reform course.
“Government must continue implementing these policies with perseverance so that internally public opinion will be convinced, partners will be convinced as well, so that we can bridge that confidence gap. The authorities are very much aware of the existence of that gap and it definitely has to be closed,” he said.