Fiscal pressure to intensify: Baz

via Fiscal pressure to intensify: Baz – DailyNews Live 4 August 2014 by Ndakaziva Majaka

HARARE – The Bankers Association of Zimbabwe (Baz) says pressure on the fiscus will continue for the remainder of the year due to anticipated decline in revenues against the backdrop of increasing company closures.

Sam Malaba, the Baz president last week told a Confederation of Zimbabwe Industries (CZI) conference in Mutare that the current liquidity challenges will continue into the foreseeable future.

“During the first 6 months to June 2014, total fiscal revenues amounted to $1,718 billion (7 percent below target) against total expenditures and net lending amounting to $1,772 billion, giving rise to a cumulative deficit of $53,6 million.

“As much as $1,65 billion was current expenditure (93 percent), with employment costs and current transfers amounting to $1,53 billion (86,5 percent). Capital expenditure was $107,9 million (6 percent of total expenditures),” he said.

Malaba said government needs to address the structure of current expenditure in the country as it is a major contributor to the country’s economic woes.

“There must be a realisation that you can’t continue with the structure of our current expenditure. Something has to give.

“You can’t spend 86 percent of expenditures on salaries, then you are not supporting the operational structures and you are not paying the debt to the private sector. There must be a restructuring within Government to bring down the cost of our expenditures in terms of salaries,” he said.

Capital expenditure currently stands at $107,9 million.

The Baz boss noted that the prevailing economic conditions mirrored poor policies and the level of unattractiveness the country has, as viewed by investors.

“We have to address the issue of our attractiveness to attract Foreign Direct Investment. We have to respect property rights, we have to respect Bippas and we have to review our indigenisation law.

“An investor will sit back and say I will not come to Zimbabwe if he feels his investment is not safe. So for us we have to make ourselves attractive as an investment destination,” said Malaba.

This comes as a recent report by an American research group revealed the country had become an insignificant destination in terms of Foreign Direct Investment (FDI) in Sub-Saharan Africa due to the quality of governance it has.

The Baz president, who is also Agribank chief executive, urged government to address the country’s debt.

Zimbabwe is currently saddled with an $8,9 billion debt which industrialists claim has “virtually blocked access to international capital markets”.

“The country risks a premium of five percentage points when looking for funding because of the arrears. You can move to the rand system you can’t do away with the arrears.

“No matter which currency you move to, you can’t run away from the arrears. We can’t run away from the International Monetary Fund, World Bank or the African Development Bank either we won’t survive. Even China will tell us to settle our debt first,” Malaba said.

COMMENTS

WORDPRESS: 6
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    feared by zanupf 7 years ago

    The final countdown !!!!! Remember roger boka ?

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    cut civil service by 75%

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    John Thomas 7 years ago

    It is good. The longer these ZANU’s hang on the more they humiliate themselves with their stupidity, vulgarity and criminality. Zimbabwe is being inoculated against everything ZANU has ever stood for. Mugabe is now known for the criminal that he has always been. Let them all reap what they have sown. The pressure will not relent until they step down. Degrees in violence are of no use now. You cannot beat and rape the economy to make it perform.

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    In another report it is suggested (correctly) that the “government” is now merely paying salaries. Soon enough even that will slip further behind. The ruling dynasty is totally silent on all of this. It is only keen on its own survival, propped up by a clique of venal gun men. Heading down the path of anarchy, free for all and a totally failed state. The only way out of this is for the international community to exert pressure for change as it will not happen from within.

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    Zvarwadza 7 years ago

    The end is nigh for these thugs. A compulsive gambler never leaves the betting table until he is sold even the pant he is wearing and that is ZANU PF for you.

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    The sword of Damocles (judgment) hangs over their door. No repentance! No restoration! I wonder how ZPF ever thought they could fool God. Fool SADC? yes! Fool the AU? Yes! Fool the world even? But God???? No sin shall remain uncovered! Its funny how us mere mortals play with fire. The fire of God’s judgment and then actually think we can get away with it. Their waterloo is going to be the one thing they have sold their souls for: money, material gain, wealth, power!!!! God will NOT be mocked!