Zimbabwe persists in reforms despite short-term economic difficulties

Zimbabwe is determined to pursue economic reforms despite natural disasters and sanctions against it.

A decision reiterated by the Secretary of Finance and Economic Development George Guvamatanga for whom the severe policy of fiscal austerity led by the government had already balanced the accounts and establish fiscal discipline in Zimbabwe never equaled for decades .

« We wanted to clean up public finances and control our trade deficit. We had to make sure we lived within our means, and we did it. He said in an interview with the Zimbabwean press.

We know that these reforms are very difficult for our people, but that does not mean that this is a bad solution. To meet the short-term challenges for our people, we have also developed various social safety nets …

President Emmerson Mnangagwa, has made the implementation of these structural reforms, the priority of this struggling economy marked by hyperinflation, lack of liquidity and endemic corruption.

The country which plans to reduce the budget deficit from 12 to 5% of GDP in 2019 has already reduced the trade deficit to 300 and 400 million dollars, against 1.8 billion dollars previously.

« We have achieved most of the targets agreed with the IMF, with the exception of inflation and the money supply, which need to be recalibrated. We intend to follow the agreed strategy and are confident that we are on the right track. Said George Guvamatanga.

The government, which eliminated subsidies on fuels and energy, is aware of the short-term impact on ordinary Zimbabweans.

However, the sanctions imposed on Zimbabwe by the United States and the European Union during the Mugabe era continue to stifle the country’s economy by limiting its access to foreign lenders.

George Guvamatanga said the sanctions affect all Zimbabweans: « We are a small economy. Zimbabwe lost 80% of its correspondent banking business due to sanctions. It has become difficult to receive money from abroad and send money abroad. It now takes days in Zimbabwe to make transactions that usually take a few hours. « 

Despite these setbacks, the government continues to open the country’s economic, political and media space. He is currently modernizing 30 laws of the Mugabe era to meet Western standards.

In July, the World Bank moved Zimbabwe from a low-income country to a lower-middle-income country. It also ranked Zimbabwe among the top 20 most improved Ease of Doing Business indexes.