Business stresses over austerity measures

Source: Business stresses over austerity measures | Daily News

VICTORIA FALLS – Business leaders gathered here for the on-going chief executive officers’ indaba — the CEO Africa Round Table — yesterday expressed serious concerns over the austerity measures announced by Finance minister Mthuli Ncube last year.

They said the cocktail of stabilisation measures — including the much-criticised two cents tax per every dollar transaction — had dampened business prospects.

The concerns were made as Ncube skipped yesterday’s session where he was billed to give a keynote address on government plans to introduce a new currency and market reforms.

Laurine Chikoko, a board member of the CEO Africa Roundtable, announced that Ncube was no longer pitching up “probably to prepare responses to the issues we are discussing”.

The currency reform session was lively, with presentations by chairperson of Parliament’s Budget Committee Felix Mhona, Joshua Sacco the chair of Parliament’s Industry and Commerce Committee, Norman Mudadi an economist and wealth manager for Devere Group, David Farley the CEO of Angu Gold and Busisa Moyo the CEO of United Refineries Limited.

Most of the speakers said they were worried about Ncube’s austerity measures which they said had dampened the economy and business investments even further.

Moyo said he was vigorously opposed to the 2 percent tax introduced by Ncube on October 1 last year that applies on mobile and card payments and bank transfers above $10 with exceptions for foreign payments and transfer of government funds.

He said the tax was “bad for business”.

In October, Ncube’s desperate bid to balance the government’s shambolic books by raising the State’s revenue through the unpopular new tax — backfired when the economy went into turmoil — leading to panic buying and shortages of basic consumer goods.

The under pressure minister was later compelled by his bosses to review the tax, but this still failed to douse the raging fires as the economy remained in dire straits — highlighted by empty supermarket shelves and the closure of some prominent retail and fast food outlets.

When Ncube presented his new measures in October he laid bare the extent of the government’s problems — revealing that its domestic debt had ballooned from $276 million in 2012 to nearly $10 billion.

In addition, Zimbabwe’s external debt now also stands at $7,4 billion — bringing the country’s total debt to $17 billion.

Ncube said driving the government’s huge debt was the issuance of tradable paper that it uses to borrow from banks — Treasury Bills (TBs) — which had increased from US$2,1 billion in 2016 to a staggering US$7,6 billion by the end of August this year.

Meanwhile, the CEOs forum yesterday conducted a referendum of the 200 chief executives about which currency reform was ideal for Zimbabwe between joining the rand community, adopting the US dollar, multi-currency regime, introducing the Zimdollar and continuing with the bond note amid a sense of increasing pessimism among business chiefs about bond notes.

The results were unavailable at the time of going to print.

President Emmerson Mnangagwa is expected to address the CEOs today.