Zimbabwe is going nowhere if it continues on its present path

Zimbabwe needs fiscal discipline, production discipline, policy discipline and speaking with one voice if it is to transform its economy from a consumptive to a productive one, the government’ chief policy adviser, central bank governor John Mangudya said.

Right now wages and salaries for the public sector are gobbling 97 percent of the government budget.

It is there now time to walk to talk to transform the economy by changing the narrative from consumption to production.

“Walking the Talk within the above context of weak economic conditions requires policy precision and urgent implementation of necessary reform measures to transform the economy,” Mangudya said.

“The process won’t be easy but must be done. It requires national sacrifice, sincerity and integrity.

“It requires the ability to share the adjustment or transformation burden across the board and between the fiscal and monetary policies.

“Reliance on one policy instrument to manage the current structural imbalances would not be sustainable to transform the economy and to restore trust and confidence.

“Overall, transforming the economy from a consumptive to a productive one requires fiscal discipline, production discipline, policy discipline, and message/communication discipline (speaking with one voice) in order to achieve the optimal levels of economic turnaround….,” he said.

Below is the full introduction to Mangudya’s monetary policy statement released on Thursday.

This Mid-Term Monetary Policy Statement is issued in terms of Section 46 of the Reserve Bank Act (Chapter 22:15). The major objectives of this Statement are:

• to highlight the global and domestic financial developments;
• to provide an assessment of the monetary policy measures taken by the Bank in May 2016 to stabilize the economy;
• to present new measures to restore confidence within the economy; and
• to offer policy advice to deal with the fiscal and current account deficits in order to change Zimbabwe’s economic narrative to production and productivity which is very vital or imperative to restore trust and confidence within the national economy.

The policy measures presented in this Statement are designed to augment the measures taken by the Bank in May 2016.

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