Politics Will Limit Speed of Zim’s Economic Change: Mthuli Ncube
23 September 2018
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Jane Mlambo|Newly-appointed Finance minister Mthuli Ncube would like to employ a “big bang” economic reform programme to the battered economy where unemployment is running above 80%, but recognises politics will limit the speed for change.

“My preference is a fiscal shock, but there is a what you call the political collar or the politics of policymaking which then slows you down. My preference would be more of a big bang approach because every day counts in terms of cost,” Ncube, a former banker, said in a briefing with journalists on the sidelines of an investor conference in New York on Friday.

Ncube joined the government of President Emmerson Mnangagwa earlier this month. Mnangagwa won a disputed vote on July 30 in the first election since Robert Mugabe was removed by the army last November after nearly four decades in power.

Lack of foreign investment, fiscal deficits and acute shortages of hard currencies like the US dollar are, but some of the economic problems Zimbabwe, once known as Africa’s breadbasket because of its agricultural exports, is enduring.

The new government’s focus on getting the economy back on track requires paying off the roughly $2 billion in arrears to international financial institutions such as the World Bank, African Development Bank (AfDB), European Investment Bank (EIB) and the $4 billion it owes the Paris Club of sovereign nations.

John Mangudya, who is both governor of the Reserve Bank of Zimbabwe and chairman of the government’s arrears clearance committee, said the strategy is to clear the debts to the World Bank and AfDB first before approaching the Paris Club.

“We are looking at many options,” Mangudya said. He expects to announce the plan within six months, noting the need for debt sustainability.

“One year from now, our wish and our hope and prayer is that we would have cleared our arrears,” he said.

-Reuters