Eddie Cross’s advice to Mthuli Ncube

Former legislator Eddie Cross says Minister of Finance Mthuli Ncube should come up with a mini budget and deal with the exchange control to arrest the current decline and shortages people are facing.

Cross who said he met Ncube and told him that he has just a month to make the essential changes. Ncube basically had two things he has to do urgently.

“First a mini budget in the very near future, in that statement he has to report on the state of the fiscus and detail the problems. He has to give a clear analysis of expenditure against the 2018 budget and highlight areas that need immediate attention,” Cross said on his blog today.

“In my personal view he has to raise additional revenues, he has to trim back State spending to the essentials and he has to ensure, overall, that he has dealt with the fiscal deficit which currently is headed for 40 per cent of all State spending and 16 per cent of the formal GDP. No progress is possible until he does that – like a traffic casualty in intensive care, stop the bleeding.

“Then he has to deal with exchange control. The reason for this is that this is the policy which, like a rope around our necks, is going to strangle the economy. Why? I have always argued that exchange control is loved by crooks and Reserve Banks and no one else. The reason being that the system allows the transfer of real assets from the private sector which is creating wealth, to the crooks in our midst and they are many.

“The other reason is that the system gives power to the unseen officials who sit in offices in Government buildings and at the Reserve Bank, who create nothing and do little else that is productive, but they control who gets allocated what little hard currency (real money) is available at an artificially low price.

“This means that they redistribute wealth, destroy the productive sectors of an economy and increase demand for hard currency because it is undervalued. The only way to cure this is to scrap exchange control completely and let the market fix the price and distribute what will always be a scarce commodity.”

Given a chance, Ncube said he would like to employ a “big bang” economic reform programme to the battered economy, but recognises politics will limit the speed for change.

“My preference is a fiscal shock, but there is what you call the political collar or the politics of policy making which then slows you down. My preference would be more of a big bang approach because every day counts in terms of cost,” he said.

Mnangagwa, whose mantra is Zimbabwe is open for business, had repeatedly said politics should now play second fiddle to economics.

He is therefore not likely to let politics stand in the way of recovery as that is what he promised the nation.

Mnangagwa is also quite aware that a lot of people including some from his own camp would like him to fail.

The opposition is already saying that its leader Nelson Chamisa, who claims to have won the 30 July elections, has the keys to the economy and are definitely wishing Mnangagwa to fail.

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