Hunger, inflation and jobs key watchwords ahead of Zimbabwe’s fiscal review
At 175%, Zimbabwe's inflation is second highest in the world after Venezuela
Harare — Zimbabwean finance minister Mthuli Ncube will on Thursday present his mid-year fiscal policy review against a backdrop of worsening economic challenges.
The government has just revealed that more than a third of the population — 5,7-million people — face hunger.
Ncube, a former head of the Wits Business School and a past chief economist of the African Development Bank, has walked a tightrope since his appointment as finance minister. The Harare government's piecemeal reforms have failed to yield positive results, and the former bread basket of the region has largely been reduced to an informal economy under his watch.
Zimbabwe is also battling 18-hour power cuts that have led to company closures, a ten-year high inflation of above 175%, as well as a long list of shortages of basic commodities ranging from medicines to bread.
A drought that ravaged the entire Sadc region has worsened the country’s economic crisis.
Ncube is expected to announce more measures to provide food handouts to more than a third of Zimbabwe's 15-million people.
Public service, labour & social welfare minister Sekai Nzenza told journalists on Tuesday that the government will have to provide greater assistance to the growing number of Zimbabweans facing hunger.
“Our latest vulnerability assessment report shows that we have 5.7-million people across the country who are in need of food.
“However, this figure does not as yet give us the exact number of the people in urban households who are in need of food but I can say there is increasing hunger both at rural and urban levels.”
Economists said Ncube faced a tough task restoring confidence among businesses and citizens affected by the economic crisis.
“People are hungry and angry and yet there is nothing much the minister can say. Companies are closing down due to the power crisis and people are losing jobs. He has also failed to address the shortages of liquid cash and foreign currency,” said Harare-based economist John Robertson.
Ncube has logged some successes, including a government budget surplus for the first time in years and an end to unchecked money-printing.
However, the surplus has come at a cost. The government’s obsession with cutting expenditure has hit pubic servants’ income hard.
Zimbabwe National Chamber of Commerce CEO Takura Mugaga said Ncube’s surplus does not tell the full story of the country’s economy.
“He has been talking about the surplus, but he has not talked about the overall surplus balance that looks at the entire debts. He must [explain] the entire surplus to the nation.”
Ncube also faces a huge challenge to contain inflation which at 175% is the second highest in the world after Venezuela.
In June Ncube indicated that inflation would come down but prices of basic commodities continued to rise in July. Fuel prices jumped 23%.