No going back on austerity measures, says Mnangagwa

President Mnangagwa says Zimbabwe will undergo a "painful" reform process to achieve transformation and modernisation of the economy.

Government is already implementing austerity measures and in an article published in the influential British publication, the Financial Times yesterday, President Mnangagwa said Zimbabwe would not back down from taking tough decisions.

President Mnangagwa compared Zimbabwe's situation to that of Great Britain under former Prime Minister Margaret Thatcher in the 1980s.

"When Margaret Thatcher was elected UK prime minister in 1979, she recognised that piecemeal change would not be sufficient to tackle the problems of labour unrest, rampant inflation and economic stagnation," began the Zimbabwean leader.

"A wholesale transformation and modernisation of the British economy was required. While there would inevitably be downsides to such rapid change, Thatcher was undeterred.

"The challenges that Zimbabwe faces today are no less acute. But my Government is committed to tackling them head-on. Like Thatcher, we are not afraid of taking tough, and at times painful, decisions. As she used to put it, there is no alternative," he said.

He said to reform, restructure and rebuild the Zimbabwean economy, the National Budget must be balanced and spending reined in, noting that the Government wage bill was unsustainable.

"A large and inefficient public sector cannot be allowed to hold back private enterprise. We have set about cutting unnecessary expenditure, therefore. We are reducing the number of ministries, limiting foreign travel and perks for officials, and retiring or redeploying senior officers," he said.

He said privatisation and the reform of state-owned enterprises - notorious for their under-performance and drag on the Fiscus - were key components of this strategy and Government would disband parastatals that had "outlived their commercial viability or necessity".

He said: "Over the past two years, we have spent large sums to support struggling state-owned enterprises. But we cannot continue to prop them up. So we have earmarked under-performing bodies for sale and have given them strict deadlines to conclude privatisation deals."

The raft of measures that Government had adopted had seen the economy showing signs of improvement, with growth forecasts revised upwards, President Mnangagwa said.

The President noted that the recently introduced 2 percent levy on electronic transfers, which make up around 96 percent of all financial transactions, and other revenue collection mechanisms, had the positive effect of whittling down the national budget deficit.

"These measures are being complemented by an anti-corruption drive that will save Zimbabwe hundreds of millions of dollars. Investigations are under way and arrests are already being made, including of ministers and senior executives. The era of zero tolerance for corruption is here," he said.

Zimbabwe is seeking partners in the global community to help its upward leap.

"We are seeking new areas for co-operation and partnership," said the President.

He emphassed the tough road ahead for Zimbabwe. "The process of change is not smooth. Some pain and discomfort along the way is inevitable.

The arduousness of the path of reform can sometimes lead governments to stall or backtrack. But as a passionate reformer leading a reformist Government, I know there is no other way. We cannot allow anything to slow us down."