Treasury commits to address economic shocks

Source: Treasury commits to address economic shocks | The Herald

Deputy Minister Clemence Chiduwa

Zvamaida Murwira Senior Reporter

THERE is a commitment by the Government to deal with economic shocks that might be caused by both external and internal factors to ensure the country becomes an upper middle economy by 2030 as envisaged by the Second Republic, Senators heard yesterday.

Finance and Economic Development Deputy Minister, Clemence Chiduwa, said external factors include how the Russia-Ukraine conflict had impacted on the economy while internal factors include unfavourable weather conditions and unjustified increases of prices of goods and services.

Deputy Minister Chiduwa said this during a Question and Answer session after senators inquired about what the Government was doing to addressing price increases of goods and services.

“We have external and internal shocks and in our 2022 National Budget, we have anticipated these shocks. We are saying as a country how do we manage these shocks, how do we address exchange rates and price increases.

“Price increases have nothing to do with economic fundamentals, but we are addressing the issue through various intervention measures,” he said.

Deputy Minister Chiduwa said to demonstrate that the Government was committed to fiscal discipline, it reduced money supply growth and never borrowed from the central bank in its bid to uphold the principle of “eat what you kill”.

“We actually had a surplus. All this means that the wanton price increases have nothing to do with economic fundamentals.

“We have noted that prices are following black market exchange rates as people are taking decisions based on behavioural issues such as what happened in the past,” he said.

Deputy Minister Chiduwa said the effect of the Russia-Ukraine conflict on the economy was that prices would rise as goods that are imported from the two countries get depleted.

Some of the goods imported from eastern Europe include fertiliser, wheat and gas.

Turning to salaries, Deputy Minister Chiduwa said Government was committed to paying competitive salaries for civil servants based on the cost of living and the capacity to pay.

Responding to another question, Deputy Minister Chiduwa said the Government had resolved the issue of guarantees with independent power producers, which had been a stumbling block for them to unlock foreign investment.

He said the thorny issue of a sustainable selling price of electricity had now been resolved.

Transport and Infrastructural Development Minister, Felix Mhona, said the problem of vehicle number plates was now a thing of the past after Government procured adequate stocks.

He said the availability of number plates had resulted in an end to corruption and rent-seeking behaviour at the Central Vehicle Registry.

Minister Mhona said what remained was the provision of adequate drivers’ license discs and they have since acquired enough raw materials for their production.

Government will clear the outstanding backlog of driver’s licences soon, as the country moves towards plastic documents which are safer, convenient and consistent with the Sadc region.