New Zim finance minister hits ground running
Ncube consults corporate firm bosses to get to the bottom of problems
New Zimbabwean finance minister Mthuli Ncube is a man on a mission. Just days after being sworn in as the country’s fourth finance minister within a decade, Ncube embarked on “listening roadshows” across the country.
His first stop on Wednesday was to listen to the challenges faced by 50 executives of some of the largest corporate firms in Zimbabwe, including Delta Beverages, a unit of global brewer Anheuser-Busch InBev; retail giant Pick n Pay; mobile operator Econet Wireless; and financial services firm Old Mutual.
The challenges faced by these corporates belie President Emmerson Mnangagwa’s “Zimbabwe is open for business” mantra, aimed at courting foreign investors into the country with the promise of the ease of doing business.
The World Bank ranks Zimbabwe at 159 out of 190 economies on its Ease of Doing Business Index.
The executives told Ncube that they were constrained by “the prohibitive cost of finance, severe foreign currency shortages, high import duties, an uncompetitive business environment and bureaucracy”, the finance ministry said.
These are just a few of the challenges that Ncube must deal with in his new post, if he is to realise his boss’s ambition of turning Zimbabwe into a middle-income country by 2030.
Zimbabwe’s economic ruin runs deep. It has had no currency of its own for nine years and government debt is excessively high, estimated last year at over 77% of GDP by Trading Economics.
The external debt owed to Western lenders such as the IMF and World Bank is $10.2bn (R152bn).
Without clearance of these arrears, it is unlikely that any new lines of credit will flow into the country.
However, in contrast to previous appointments made at the finance ministry, Ncube’s appointment sparked a modicum of market confidence.
Mnangagwa said he thought Ncube was “capable” when he explained the curious choice for his cabinet this month.
Finance ministers in the past decade have included Patrick Chinamasa, a lawyer; Ignatius Chombo, a teacher; and Tendai Biti, a lawyer.
Ncube was the chief economist and vice-president of the African Development Bank.
His regional and international contacts, economic observers said, would come in handy when he goes out to make his case for Zimbabwe’s funding from international financial institutions that have long shunned the country. All that he can try and do is to influence and persuade the politicians to go the way that makes sense for the economy.
Without that it will be difficult.