FINANCE minister Mthuli Ncube will next month unveil a
transitional economic stabilisation programme that will address fiscal and
monetary reforms as well as an arrears clearance programme.
Zimbabwe is saddled with fiscal pressures as the public
sector spending is chewing above 90% of the country’s revenue, leaving little
for social and infrastructure development.
Ncube yesterday met outgoing British Ambassador to
Zimbabwe, Catriona Laing, and outlined how the United Kingdom would assist in
arrears clearance.
“I also did share with Ambassador Laing that we are working
on a transitional economic stabilisation programme that is likely to be
operationalised in line with vision 2030,” Ncube said.
“In terms of that vision, we have to undertake certain
reforms in terms of fiscal consolidation, (and) arrears clearance. The UK has
been a big partner in terms of arrears clearance, supporting us all the way on
how to think about it and convening important international meetings here and
there, supporting the arrears clearance.”
Zimbabwe is burdened by a debt overhang of over $18 billion
accrued from both public and private sector borrowing, resulting in the country
sinking deeper into a fiscal quagmire since 2013.
Domestic debt has risen to $10 billion, while external debt
stands at $8,5 billion.
Government has been issuing quasi-currency instruments in
the form of Treasury Bills currently standing at about $2 billion to fund its
domestic requirements.
“The direction on currency reforms is linked with the
direction of fiscal reforms,” Ncube said.
“What we are considering is a package. In a sense, the
fiscal side is an albatross to the monetary side. So if we are going to have
monetary reforms, we are going to have fiscal reforms.
“That is reducing the budget deficit (and) getting it down
to a single digit as quickly as we can and adopt a budgeting approach that
always take a medium term approach. We must be clear on where we want to go in
three years’ time.”
Ncube said he would have to further discuss the issue of
arrears at the annual International Monetary Fund (IMF) and World Bank spring
meetings in Bali Nusa Dua, Indonesia, taking place between October 12 and 14.
“We don’t have timelines yet, but it’s about options, then
steps once the options have been chosen. So there are various options, so we
are looking at those options and see what’s workable. But we are on top of
this,” he said.
Laing said the spring meetings would be a good opportunity
to set out a clear vision on how the country seeks to clear its arrears.
“The IMF and World Bank meetings in Bali will be a very
good opportunity to set out the vision on a fiscal and monetary side with the
creditors and to see what the timelines will be on clearing the arrears,” she
said.
“We recognise that you need support and we are here to
provide that support to try and encourage the process on being back to the IMF
programme perhaps on an interim staff-monitored programme as soon as possible.
“So we have to start a serious dialogue with the IMF which
will unlock what you really need from the international community, that is
lines of credit.”Newsday
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