Cautious welcome for new fiscal plan

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Mugove Tafirenyika

CHIEF WRITER

tafirenyikam@dailynews.co.zw

MANY Zimbabweans, including ordinary consumers and economic experts, have cautiously welcomed the country’s new five-year economic plan — which authorities say will further improve the lives of long-suffering citizens.

In addition, the people who spoke to the Daily News yesterday said the government needed to continue with its efforts to re-engage with Western powers, to attract much-needed foreign investment into the country.

This comes as President Emmerson Mnangagwa has said the lives of ordinary Zimbabweans are set to improve, after launching the country’s new economic blueprint — the National Development Strategy 1 (NDS1) — which succeeds the Transitional Stabilisation Programme (TSP).

Speaking to the Daily News yesterday, consumers and leading economic experts said authorities needed to match the NDS1 with the right policies.

The spokesperson of the National Consumer Rights Association (Nacora), Effie Ncube, was among those who said consumers were cautiously welcoming the government’s new economic plan.

“The NDS repeats some things that we have seen in previous blueprints and we do not think the government will be able to live up to expectations.

“In spite of the stabilising exchange rate currently being experienced, business and consumers have no confidence in our currency.

“There must be complete eradication of corruption, and the correction of the devastating policy inconsistencies that have in the past repelled investors,” Ncube said.

“There is also a need to address the risk factor of the country. This country is considered by investors as having a very high risk factor given the frosty relations the country has with the United States of America and the European Union.

“Unless the government is able to address that, it will not be able to attract the necessary capital investments that will push the country into the middle income range,” Ncube said further.

Economist Eddie Cross said the NDS1 had modest objectives which could be met if authorities matched it with the right policies.

“It might sound a huge call, but if we tackle all those issues, these targets are achievable,” Cross said.

Another veteran economist, John Robertson, said for the NDS1 to succeed, there was need for massive investment in the country, especially by foreign investors.

“The levels of investment inflows will have to be extremely high to achieve steady GDP growth. I am looking forward to seeing very persuasive arguments for that much investor interest.

“Per capita GDP of $3 200 is about eight times the current level — a very extravagant target!” Robertson told the Daily News.

NDS1 is expected to see the economy growing by five percent every year during its five-year lifespan — which growth would be driven by agriculture, mining, manufacturing and tourism.

According to the blueprint, the accelerated growth would see the creation of 76 000 jobs in the formal sector, the further reduction of inflation which is currently at more than 450 percent — to between three and seven percent by end of 2025.

The launch of the ambitious economic plan comes as Zimbabwe is beginning to enjoy relative economic stability — after months of chaos which saw inflation soaring to 800 percent, amid foreign currency shortages and high prices for basic consumer goods and services.

It also comes after the recent implementation of a raft of measures — including the introduction of the foreign currency auction system in June, which has reined in the hitherto rampant forex parallel market.

When the TSP was unveiled in October 2018, Finance minister Mthuli Ncube was heavily criticised at the time for his blueprint — which saw him, among other things, introducing an unpopular two percent transaction tax, which critics said had worsened ordinary people’s economic hardships.

The TSP’s introduction also kicked in at a time that Zimbabwe began to experience its worst economic crisis in a decade, triggering steep prices of basic consumer goods — amid rising inflation, shortages of fuel and critical medicines.

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