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Zimbabwe economic reforms charms top economists

12 Aug 2020 at 16:47hrs | Views
Despite inheriting an economy on the brink of collapse in 2018, marked by a 40 percent fiscal deficit from his predecessor the late Cde Robert Mugabe, ZANU PF First Secretary and President Cde Emmerson Mnangagwa has in less than two years erased both the fiscal and current account deficit on the back of strong economic reforms initiated by the New Dispensation, a senior economist has said.

Zimbabwe's fiscal deficit woes at a high of 40 percent in 2018 were worse off, compared to that of the Greece crisis which was triggered by an 8 percent deficit.

President Mnangagwa's restoration of macro-economic stability comes in the back of his pledge in The People's Manifesto 2018 where he promised to restructure the National Budget which he said was skewed towards consumptive expenditures.

The President vowed to dedicate more funding in favour of productivity.

"Thus, the ZANU PF Government's Fiscal Policy will put emphasis on strong fiscal discipline, accountability and transparency for the restoration of macro-economic stability as well as increased funding for national development projects and programmes," reads in part The People's Manifesto 2018.

True, to President Mnangagwa's servant leadership style anchored on walking his talk, top notch economists among them MDC founding member Mr Eddie Cross have been charmed by the country's economic reforms.

In that regard, in an interview with AriseNews Mr Cross, applauded President Mnangagwa for restoring the country's macro-economic stability as well as attaining both current account and fiscal surpluses in record time.

While conceding the road has been painful, Mr Cross also said that he was confident President Mnangagwa had laid a strong foundation for the economic recovery of the country.
 "He (President Mnangagwa) inherited an awful messy from Robert Mugabe. At the time he became a President of the country in 2017 we had 40 percent fiscal deficit in the budget. We were running a very a substantial account deficit.
"We had domestic bank balance which were expressed in US dollars of nearly US$23 million completely unsustainable, completely unrealistic. When he  came to power he pledged that he would in-fact restore macro-economic stability to Zimbabwe and get the economic fundamentals right and I think he has done that but the process has been very painful.

"If you think that Greece crisis was when they had an 8 percent fiscal deficit but we had a fiscal deficit of 40 percent completely unmanageable. President Mnangagwa fixed that in a matter of weeks after assuming the Presidency in July 2018. He has gone on and in fact we now have a current account surplus as well as fiscal surplus," Mr Cross.

Cross said the country was beginning to the reap the benefits of President Mnangagwa's economic reforms as evidenced by the recovery of the country's export industry as well as the reduction in the import bill owing to improved local production.

"And I think we are beginning to see the benefit of that (economic reforms). Export industries are growing again, domestic markets which were completely dominated by imported goods are now supplied to about one third of their total stock by local products from about 5 percent, 18 months ago. And I think that the chances are now we are laying the foundation for improved growth and some stability," said Mr Cross.

Mr Cross also noted that the local currency had also started to stabilise following the introduction of the Foreign Exchange Auction.

"The introduction of the auction seven weeks ago has brought some stability to the foreign exchange market and has strengthened the local currency," he said.

Source - David Mwanza
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