Zimbabwe to reduce its budget deficit

Zimbabwean Finance Minister Mthuli Ncube in a swearing ceremony of new cabinet ministers at State House in Harare, Zimbabwe. [Photo: Courtesy]

HARARE - Zimbabwe wants to reduce its budget deficit to 4 percent of gross domestic product in 2019, down from an 11.1 percent forecast this year through various expenditure cuts, Finance Minister Mthuli Ncube said on Thursday.

The deficit widened after President Emmerson Mnangagwa’s government cranked up spending by increasing public sector salaries and purchasing farming inputs for rural farmers ahead of a disputed July 31 presidential election.

Ncube told members of parliament during a pre-budget briefing that the government would stop the central bank’s quasi-fiscal operations such as providing direct funding for projects, review annual bonuses to the public service, cut foreign travel and perks for senior officials.

Ncube said the government would also partially sell or list its shares in telecoms, banking and mining companies it owns in a period of six to nine months from now.

Past efforts by former finance minister Patrick Chinamasa to rein-in spending under Robert Mugabe’s rule failed, partly due to lack of political support, analysts say.

Ncube is under pressure to push through the reforms needed to lift Zimbabwe’s stricken economy and attract foreign lenders.

Zimbabwe, which dumped its currency for the US dollar in 2009, is facing acute dollar shortages, which has seen prices of imported goods, including medicines spiral in recent weeks.