In conversation with Zimbabwe Finance Minister Mthuli Ncube

Zimbabwe is facing economic challenges. Their President Emmerson Mnangagwa was supposed to attend the World Economic Forum but cancelled the trip to go and deal with violent protests that erupted over fuel price hikes. His Finance Minister Mthuli Ncube is in Davos and spoke to Economics editor Thandeka Gqubule Mbeki.

Now zimbabwe is facing economic challenges there president emerson on ganghwa was supposed to be a supposed to attend the world economic forum in davos switzerland but cancel the trip to go and deal with violent protests that erupted over fuel price hikes in his country now his finance minister i’m duelin movie is in davos and spoke to economics editor ton dakar

Kabul in baekje we interested in having an involved discussion about the possible solutions to the economic crisis that grips your country will be talking monetary policy will be talking macroeconomic policy and what is in the mind of the administration about how to stabilize the economy any any views that you may express upfront about how to stabilize these things

Do you have a three-point plan a five-point plan can you tell us what your high-level views are with the whole plan thing you think your 10-day away the whole plan is called the transitional stabilization program and there are not the word stabilization but but you know what when you’re coming from a position of disequilibrium when things have been in decay for the

Past 20 years literally since 2000 then stabilisation may actually cause some turbulence and that that’s what is going on in our in a way on the economic front so we’ve so we’ve got this agenda called the transit establishment program which is a two-year agenda up year 2020 and then beyond 2020 we have another five-year strategy and then another five years up to

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Year 2030 and with the whole vision called the 23rd division which aims to take the bubble up to an upper middle income status and by that year already lower middle income or at the middle income country with the gdp per capita of $1600 per person who wanted to want to double that at my age at 2030 so let me try to unpack this transitional stabilization program

Because that is our response to normalizing things in zimbabwe can you tell me if the stabilization program has austerity at its very roots because imposing austerity where there already is economic crisis in recent economic history that you can almost expect pushback and turbulence and more suffering on the people who have already suffered quite a lot did me

Explain in the budget after launching the the transition establishing program oversee also presented a budget graph for the government and and its theme was on austerity for or pastel for prosperity that really is a message also for government itself which is that we have to live within our means the budget deficit for 20 you know 18 was double-digit 11 percent

Of gdp one of the highest in the region as you can imagine and perhaps one of the highest in in the world so you can understand why a minister of finance would be interested in austerity to make sure that we will live within our means we know it is tough it is painful but it is doable and in that realm we said let’s focus on fiscal discipline that’s within the tsp

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Program within the budget as well when fiscal discipline live within our ways restructure the civil servant and reduce aggregate government waste reduce this we even cut down on our wages by by by the way as ministers from the president on on what a downwards and the president by the way has been leading from the front on this issue that is on the cost containment

Front on the revenue front we’re improving tax collection for example and we push through these two percent attacks on financial transactions at basically bolster our revenue occur collection but also were continuing to do other things a to stimulate production as well through the texas and so just raising more revenue but it’s also stimulating the productive sector

Stimulating exports using the tax system so there’s a whole agenda around fiscal discipline they’re disciplined but also the right tax incentive that that’s one side well also say that one to reengage the international community and pay off what zimbabwe owes to the international community we all the african development bank we all the world bank and the total is

Basically a just over to two billion dollars and and this needs to be paid off because why these are called creditor for institutions the the the areas with these institutions have meant that we’ve lost so many credit lines for a banking site and zimbabwe right now base cannot easily access credit an offer from outside without the support of the central bank and

Treasury giving guarantees and so forth then we have to structure around minerals so that is another pillar and fourth these these structural issues within the mahboy improving the environment for doing business basically we’ve removed the indigenous asian lorimer the indigenous asian law so we dealt with that we’ve done away with it except for the darling sector

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We are privatizing with yeah i can give you a list of car privatization opportunities in the barber we’ve opened up investments and were promoting investments into the mining sector what’s going to happen that over the next couple of years there’s gonna be eight billion dollars being invested by the private sector into the mining sector resulting revenues of twenty

Four billion so so there’s all this opportunity to create jobs and create a stability and is creating the right environment even for us to to to introduce currents before

Transcribed from video
In conversation with Zimbabwe Finance Minister Mthuli Ncube By SABC News