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Zimbabwe economy stabilising, claims Mthuli Ncube

by Staff reporter
13 Apr 2019 at 15:51hrs | Views
FINANCE minister Mthuli Ncube says Zimbabwe's economy is stabilising following the introduction of economic reforms announced under his Transitional Stabilisation Programme (TSP).

Latest official figures show that total revenue for January 2019 was $487,6 million of which, tax revenue amounted to $468,2 million and non-tax revenues of $19,4 million were collected. Total expenditure for January 2019 were projected at $385,2 million, accordingly, a budget surplus of $102,4 million was realised.

"Following the onset in the implementation macro-fiscal Stabilisation measures of the Zimbabwe Transitional Stabilisation Programme (TSP) which were further buttressed through the 2019 National Budget austerity measures, performance of Zimbabwe public finances started improving with budget deficits being contained from October 2018.

By December 2018, a phenomenal budget surplus was recorded according to the preliminary budget outturn," Ncube said.
This development, according to the Treasury boss, was against a background of improving revenue collections.

Revenue collections during the fourth quarter of 2018 stood at $1,69 billion, that way surpassing the set target of $1,18 billion by 43,4 percent.

This fourth quarter performance also represents a phenomenal 60 percent increase from the collections of $1,06 billion recorded during the same period in 2017.

"Similarly, fourth quarter revenues surpassed third quarter revenues of $1,3 billion by 31,3 percent, reflecting high inflation impact, as well as the introduction of the Intermediated Money Transfer Tax  in November," Ncube said.

For February, total revenue was $606,7 million against a budget of $462,7 million resulting in a positive variance of $143,9 million.
Major contributions to this variance were tax in income, which contributed $141,4 million against a budget of $113,5 million and tax on goods and services, which contributed $336,4 million against a budget of $256,4 resulting in a positive variance of $80 million.

However, the International Monetary Fund (IMF) believes that Zimbabwe's economy is still besieged with deep macroeconomic imbalances, with large fiscal deficits and distortions in the foreign exchange.

This is despite claims by government that the economy has recovered due to the new political dispensation as well as fiscal and monetary reforms.

"Zimbabwe is facing deep macroeconomic imbalances, with large fiscal deficits and significant distortions in foreign exchange and other markets, which severely hamper the functioning of the economy," IMF's team leader Gene Leon said in an end of mission statement on Zimbabwe.

Leon's team visited Harare last week where the IMF staff team met with Finance minister Mthuli Ncube, Reserve Bank of Zimbabwe governor John Mangudya, other senior government and RBZ officials, and non-government representatives.

During the visit, IMF staff and the Zimbabwean authorities reached agreement on macroeconomic policies and structural reforms that can underpin a Staff Monitored Programme.

Source - dailynews