New Zimbabwe finance minister wants to clear World Bank arrears

HARARE: Zimbabwe’s new finance minister said he would accelerate plans to pay arrears to the World Bank and the African Development Bank and would work on a three-year programme to cut government spending.

Mthuli Ncube did not spell out how he would speed the clearance of US$1.8 billion in arrears – but said it would be a vital step in rebuilding investors’ confidence.

“It’s one building block,” he told reporters after being sworn in as finance minister to watch over an economy struggling with a severe shortages of dollars, and with unemployment above 80 per cent.

Economist have said the repayments would be a vital step towards Zimbabwe qualifying for an International Monetary Fund (IMF) programme.

But such a programme could come with politically painful conditions, including a reduction of the huge civil service and a cut in the budget deficit from 16 per cent to single- digit levels, say analysts.

Ncube said he would discuss the size of the civil service wage bill with new President Emmerson Mnangagwa, but did not go into further detail.

Previous efforts to cut public sector wages – responsible for 93 per cent of the national budget – and civil service jobs were blocked by former president Robert Mugabe.

“Internally we need fiscal consolidation and making sure that on the expenditure side, we live within our means or move towards that.

“That is always a process, always need a kind of three year process, fiscal consolidation is not a big bang approach,” the minister said. — Reuters