Honeymoon for Mnangagwa | IOL Company Report



HARARE –
A budget deficit of $ 1.4 billion in the first half of the current year is the biggest economic challenge for the newly opened Zimbabwe leader, Emerson Mnangagwa, who, according to economists and analysts, has to clear the field to increase the country's low productivity and to adopt a favorable policy to attract investors.

With the elections behind Zimbabwe moving, the focus has shifted to the efforts of the Mnangagwa government to tackle the economy.

He starts this with appointments in the cabinet, which are eagerly awaited in response to Mnangagwa's commitments that there will be a shift in priorities under his management.

"If he does well, he can reassure the economy and business that it is worth investing in Zimbabwe, so much money in the field of investment funds was on hold because of the elections and the political risk factor, but as long as investors get the right signals, the ball is now in the new governmental court ", said independent economist Moses Moyo.

Zimbabwe, which counts South Africa as its largest trading partner, is desperately looking for investments in mining, tourism, agriculture, industry and manufacturing sectors. The funds
say that civil servants are needed to update local companies and to upgrade the infrastructure.

Although addressing investor concerns will be one of the top priorities and expectations around the Mnangagwa administration, the main concern at the moment is in the form of ballooning of the budget deficit. In the six months to June, the government of Zimbabwe had incurred a deficit of about $ 1.4 billion.

In his inaugural address, Mnangagwa said this week that his new government will work to address the economic imbalances resulting from a huge import bill and a high payroll for public services.

"Measures will be taken to address the budgetary imbalances that could undermine the viability of the financial sector, as shown by the spiral
cash shortages and the disruptions that plague the exchange market for foreign currency, "said Mnangagwa.

In Zimbabwe a shortage of cash has been held, the clearest sign that Mnangagwa's honeymoon will be after winning the July 30 elections short-lived
. The industrial Busisa Moyo said this that week
parallel "rates on the street" for the greenback "have dropped from 80-85% to 60-65%!" although banks are still struggling with money shortages.

The predecessor of Mnangagwa, Robert Mugabe, opposed attempts by the International Monetary Fund to reduce the payslip of the civil service. Mnangagwa seems to be aware that high civil service wages have an impact on economic and budgetary performance after he said "necessary measures will be taken to create fiscal space through rationalization and cost savings".

During the first half of the period, the public wage bill was $ 1.3 billion, while recurring government spending was $ 300 million – above the target of $ 2.4 billion. Zimbabwe also looks forward to Bilateral investment promotion and protection agreements that it has with other countries "to promote and encourage investment" from all over the world.

Zimbabwe is also saddled with a high external debt position, which is frustrating for the search for new financing. Experts say that the country must accelerate its plans for debt settlement to unlock further funding opportunities.

– BUSINESS REPORT


Source link

Leave a Reply