Austerity measures to go next year: Ncube

AUSTERITY measures introduced by government this year will be over by next year when the country starts experiencing economic growth, Finance and Economic Development minister Mthuli Ncube has said.

In addition to the cost-cutting measures, Ncube introduced a 2% tax on intermediated financial transactions to shore up government coffers, leaving an already overtaxed citizenry hard pressed.

Speaking at the Zimbabwe International Business Conference held in Bulawayo yesterday, Ncube said the austerity measures could not be run for a long time.

“We need to go through some period of austerity, but build towards prosperity and I tell you that next year you will hear me use the word austerity less and less because we will start entering prosperity,” Ncube said.

“I think I will limit austerity just to one year and then we move to prosperity towards 2023. But quite clearly, you can’t do austerity for three years; it’s a bad idea. One year, get it right and move on”.

He said government was doing well on the fiscus side.

“The government is solvent. We are running surpluses and we have been doing an average surplus of a $100 million a month since September last year,” he said.

“This year alone, in January, we had a surplus of $102 million. In February we had a surplus of $85,5 million (and) in March our surplus would be double that.It will be just above $200 million. Money supply is not growing. So where is the pressure on the exchange rate coming from?”

He said the pressure was coming from speculation, which is bad for the economy.

Ncube also pleaded with industry to make use of the interbank market, saying as government they were making sure that economic fundamentals were put in place.