Govt formulates new economic policy

The Government of Zimbabwe has formulated a new economic policy meant to bring the nation back to economic prosperity as well as repay all outstanding debts to international creditors, the Minister of Finance, Tendai Biti, has said.

Tendai Biti
Tendai Biti

The policy, which began in April, is known as the Zimbabwe Accelerated Re-engagement Economic Programme and will run for the next 18 to 24 months.

“This policy should facilitate accelerated re-engagement with the development partners on policy issues,” Biti said in Harare.

“ZAREP will be a stepping stone towards arrears clearance, debt relief and new financing from the international community, including international financial institutions,” he said, adding that this would be done through the establishment of a good track record of implementing sound macro-economic policies. The new blueprint will also seek to contain and manage the public sector wage bill and enhance the implementation of the recommendations of Civil Service Audits while securing strong support from development partners for arrears clearance and debt relief.

Zimbabwe’s accumulation of external payments arrears to its multilateral, bilateral and commercial creditors began in 2000. But the debts have soared to unsustainable levels, breaching the $3 billion mark as of December 2011.

The government is failing to service its debts to such institutions like the IMF due to a poorly performing economy. On several occasions, the IMF has threatened to suspended Zimbabwe’s membership because of its failure to repay loans advanced to it by the Bretton Woods institution.

Disturbances in the agricultural sector following the controversial land redistribution programme of 2000 has robbed the government of the opportunity to service the fiscus through taxation, while the generally suppressed industrial sector has had the same effect.

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