Mthuli Ncube’s reality check

Finance minister Mthuli Ncube will today present the Mid Term Fiscal Statement.

The outbreak of the novel coronavirus, which is also known as Covid-19, disrupted business both in the public and private sectors.

As the pandemic continues to be a major public health risk, several governments across the globe have put severe strains on the fiscus in
response to Covid-19.

A few months back, Ncube announced an ZW$18bn rescue package to stimulate productivity and assist vulnerable groups of the society. The impact of this rescue plan is yet to be felt. In fact, companies across several economic sectors have scaled down operations and others have laid-off workers.

The socio-economic impact of Covid-19 will have far-reaching ripple effects. Structural weaknesses have been laid bare and safety nets have been
stretched to the limits.

These are some of the litany of concerns that Ncube faces when he presents his update.

Within the government too, all is not well. Public Service workers are unhappy over the government’s recent adjustment on wages. Labour unions are planning to protest demanding payment of salaries in United States dollars.

It never rains but pours for Ncube who at the same time last year would be
bragging that the treasury had recorded a surplus.

The finance minister is also under pressure when it comes to re-engagement with multilateral creditors. Bilateral credit appears to have dried up as allies such as China deal with their domestic issues.

After promising to embark on wholesome reforms that would form the bedrock for accessing long-term concessionary funding, it came as a rude awakening for Ncube when the creditors told him that so little had been done and so much has to be done.

Convincing his principal on the urgency of reforms is something that he
will not find easy. Yet he badly needs the funds. Multilateral creditors expect Ncube to use his economic gravitas to push reforms.

The Zanu PF government sees the reforms as weakening President Emmerson Mnangagwa’s grip.

Millions are waiting for answers on why it has taken this long for Zimbabwe to be stuck in this quagmire.

Coherence between Ncube’s fiscal policy and the Reserve Bank’s monetary
policy is also something that the finance minister should strive to do.

Over the past year, there appeared to be conflicting statements between the two policymakers. This has sent the wrong signals both at home and abroad.

For a country badly in need of fresh capital to stimulate her economy and bringout millions out of poverty, that is undesirable, to say the least.

The overreliance on Statutory Instruments which have often come in as
a stop-gap reactionary measures should also stop.

Our policies should be
coherent and predictable, period.

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