Zimbabwe's economic performance continues to be disappointing, but finance minister Mthuli Ncube insists that if the country can stay the course, his economic reforms will bring about the changes its citizens are longing for.
For many hard-pressed Zimbabweans, it's difficult to recall a time when the economy was out of the doldrums. Under the erratic and isolationist rule of former president Robert Mugabe, the country witnessed currency collapse, widespread poverty and mass unemployment, eventually culminating in his 2017 removal in a palace coup.
Yet despite his replacement by a Zanu-PF government ostensibly committed to economic reform under President Emmerson Mnangagwa, the last few months have defied citizens' hopes of a rapid improvement in living standards.
Inflation has been persistently high, climbing above 75% in April, and a newly introduced quasi-currency, the RTGS dollar, has failed to gain market confidence. Importers struggle to source basic goods, while the withdrawal of fuel subsidies has enraged a struggling population.
Natural disasters including El Nino droughts and Cyclone Idai have compounded Zimbabwe's woes at the worst possible time by exacerbating agricultural hardship. The IMF predicts the economy will contract by 5.4% this year--a figure the government contests.
The unenviable task of turning this situation around has fallen to finance minister Mthuli Ncube, an academic, development banker and self-described technocrat whose stringent policy prescriptions are prompting hope and consternation in equal measure. The cerebral Ncube, a visiting professor at the University of Oxford, is offering his country a course in fiscal consolidation--reduced government expenditure including an end to costly subsidies, reform and partial privatisation of failing state companies, and support for the controversial RTGS dollar. Speaking to African Business, Ncube says that despite hardship, Zimbabwe must stay the course and complete his challenging reforms.
"I think that really the solutions lie in the success of the economic reform agenda. The inflation issue for example is caused by specifically monetary issues. On the fiscal front we're now running a surplus for the last four months, so the fiscus is not contributing to growth in money supply and therefore inflation ... The budget deficit in 2017/18 was double-digit, almost 11% of GDP, so you can already see that the level of domestic spending by government was the source of the...