Communique to the Ministry of Finance and Economic Development and the Reserve Bank of Zimbabwe

Source: 12 October 2018Democracy, Economy

We, the representatives of social and economic justice networks and organisations, having met on the 5th of October 2018 to deliberate on the Impacts on ordinary citizens of the joint Monetary and Fiscal Policy Statements presented on the 1st of October 2018, are:

Concerned about the ceaseless foreign currency and cash shortages, high budget and current account deficits, emerging inflation pressures; slow moving re-engagement process; infrastructure deficiencies and weak social service delivery as enunciated in the Monetary Policy and the Fiscal Measures recently presented by the Reserve Bank Governor and the Finance Minister respectively;

Bewildered by the government’s increasing appetite to borrow which has driven both the external and domestic debt to unsustainable levels;

Aware of the need to increase the tax base and improve domestic resource mobilisation for improved service delivery;

Worried by the continuous violation of section 300 of the constitution on limits of State borrowings, public debt and State guarantees;

Outraged by the prevalence and recent outbreak of medieval diseases such as cholera and typhoid in the country;

Worried about the continuous exclusion of citizens from the policy making process especially the recent vision 2030;

Disturbed by the policy inconsistency regarding the use of bond notes, the drive towards a cash-lite economy and the electronic transaction tax;

Disturbed by the introduction of separate FCA accounts for Nostro and RTGS funds that perpetuates income inequality and reinforces a dual society between the elite community and majority poor who do not have access to forex;

Cognisant of the economic and social injustices perpetrated against communities by multinational companies;

Recognising the propensity to pursue neoliberal policies whose implications on the poor are unbearable; and

Perturbed by the incessant corruption in the country.

We therefore recommend the following to the Government of Zimbabwe

Debt management

  • Adhere to the Constitutional provisions regarding limits of State borrowings, public debt and State guarantees;
  • Come up with legislative and regulatory provisions for ensuring that those violating the constitutional, regulatory and institutional provisions are held accountable and appropriate penalties and disciplinary action are enforced;
  • Commission a comprehensive debt audit to ascertain the extent of the debt, how it was used or misused and create a basis for total debt cancellation;
  • Develop a comprehensive, inclusive and sustainable debt management framework that will guide the Debt Management Office to avoid falling into the same trap in future; and
  • Honour the social contract with citizens which is crucial for enhancing accountability and ensuring tax compliance currently below 30%

Corruption

  • The government must ensure transparency and openness in revenue collection, borrowing and spending to fight corruption; and
  • Subsidies, tax exemptions and public procurement should be made public.

The electronic transaction tax

  • The electronic transaction tax should be levied on transactions above the poverty datum line which is currently at US$522 to cushion the poor and marginalized.

Foreign Currency Shortages

The government should come up with long term strategies for overcoming the current forex shortages by relaxing the regulations and removing duty on importation of basic commodities to easy the shortage being experienced on the market. This will allow the government to redirect the resources towards essential goods and services such as medical equipment and delivering clean water to citizens.

For more information, please contact:
Janet Zhou, Executive Director, Zimbabwe Coalition on Debt and Development on email janet@zimcodd.co.zw, Tel: +263 4 776830/1
Or Cell number +263 775415685
Or
Joyce Nyamukunda, the Coordinator, Publish What You Pay Zimbabwe on email joyce@zela.org. Tel: +263 4 257360/3 or Cell number +263733789182

Signed

  • ActionAid Zimbabwe
  • Centre for National Resource Governance (CNRG)
  • ICD
  • National Association of Youth Organisations (NAYO)
  • Poverty Reduction Forum Trust
  • SEATINI Zimbabwe
  • Transparency International Zimbabwe (TIZ)
  • Women and Law in Southern Africa (WLSA) Zimbabwe
  • ZCIEA
  • ZimCODD
  • Zimbabwe Women’s Research Centre & Network (ZWRCN)