Unpacking the Transitional Stabilisation Programme:
AS ZIMBABWE moves to re-engage with the international community, top of the priority list has been the clearance of the arrears to international financial institutions which is expected to open new lines of credit for the country.
Finance and Economic Development Minister Prof Mthuli Ncube, attended the International Monetary Fund (IMF) and World Bank meetings in Bali, Indonesia, last month where he presented a road map to clear the arrears to the World Bank, African Development Bank and European Investment Bank.
The arrears clearance Road Map was welcomed by all the cooperating partners and creditors present who uniformly expressed their support for Zimbabwe.
Speaking at the 2018 Pre-Budget Seminar in Bulawayo recently, Prof Ncube said the roadmap has three items: Presentation of a credible economic reform plan (Transitional Stabilisation Programme (TSP): October 2018 - December 2020); Clearance of AfDB and World Bank debt arrears; and Clearance of Paris Club debt arrears. Below is the presentation made by Prof Ncube unpacking the TSP: Transitional Stabilisation Programme
The Transitional Stabilisation Programme (TSP): October 2018 – December 2020, outlines policies, strategies and projects that guide Zimbabwe’s social and economic development interventions up to December 2020.
The TSP draws its policy thrust from Vision 2030 which seeks to transform Zimbabwe into an Upper Middle Income Economy by 2030, focusing on immediate quick-wins that are aligned to reality and capacity, and laying a robust base for economic growth.
This will pave way for the development of two five year National Development Strategies, ´the first Plan being for 2021-2025, and the second Plan covering 2026-2030. The Programme focuses on the following: Fiscal Consolidation, Stimulating production and exports, Structural quick-win reforms to stimulate growth, Governance reforms. Fiscal Consolidation Restoration of Fiscal Balance. ◆ targets strengthening fiscal responsibility and management of Government expenditures in order to create an appropriate environment for increased Budget development expenditures that enable and enhance the economy’s overall productive activities.
This will entail implementation of fiscal consolidation measures to contain the fiscal deficit, including wage bill moderation, sustainable financing of agriculture, deficit financing reforms and revenue mobilisation, emphasising on plugging leakages, ZIMRA admin- istrative efficiencies and appropriate legislation.
Stimulating Production & Exports The TSP proffers policy interventions to build investor confidence, and enable private sector led economic growth entailing consistent application of credible and sustainable policy interventions, underpinned by strengthening the rule of law and avoidance of arbitrary policy reversals.
In order to enhance competitiveness of industries, the Transitional Stabilisation Programme proposed measures that address underlying causes of high cost of doing business, including inputs supply across various value chains, access to enabling public utilities, domestic cost of finance, and introduction of flexibility in Zimbabwe’s labour laws.
The Programme will prioritise the transforming agriculture with greater involvement of the domestic financial system in underpinning the financing of agriculture, as well as improving farmer access to markets for livestock and other agricultural produce
Priority will also be on mining exploration & development, including reopening of closed mines; expansion of mines that are operating below capacity; opening of new mines; and promoting beneficiation and value addition, through domestic smelting and refining, to increase earnings from mineral resources.
Structural Reforms
The Transitional Stabilisation Programme is also underpinned by structural reform measures to mitigate the challenges and risks that our economy continue to face.
These measures include: ◆ Deepening the ease and cost of doing business reforms to improve competitiveness; establishment of a One Stop Shop Investment Centre - Zimbabwe Investment Development Authority (ZIDA); public enterprise reforms; and labour law reforms, among others.