By Davison Vandira
The government’s fiscal consolidation program has started paying dividends as is being evidenced by the exceeding of revenue collection targets for the first quarter of 2020 by 11 percent to $14 billion Zimbabwe dollars.
Since 2018, the government of Zimbabwe embarked on an ambitious project of fiscal recalibration through the famous austerity for prosperity economic initiative which culminated in government through the Ministry of Finance and Economic Development adopting massive rationalisation of government expenditure and on the other hand enhancing revenue streams.
The rationalisation programme is fast bearing fruits as employment costs are now within acceptable thresholds of 40 percent and below, coming from as high as 80 percent whilst capital expenditure has greatly improved laying the necessary foundation for prolonged economic growth.
The Minister of Finance and Economic Development, Mthuli Ncube, said that he is satisfied by the level and progress of fiscal consolidation that the economy has witnessed to date
“We have witnessed very encouraging statistics in as far as revenue collection and expenditure are concerned,” said Minister Mthuli while addressing members of the media at the Post Cabinet Briefing this Thursday.
“The current pattern is that employment costs for the first quarter of 2020 are at ZW$4.75 billion which translates to about 40 percent of the total revenue collected and this is a positive development in the Zimbabwean context, also the level of capital expenditure has vastly improved as more resources were channeled towards infrastructure development rather than recurrent expenditure as what used to happen in the past.”
The achievement of a sustainable fiscal consolidation can be traced back to the introduction of the Transitional Stabilization Programme(TSP) which ushered several economic reforms towards changing the country’s economic fortunes.