Wednesday, July 25, 2007
RESERVE Bank of Zimbabwe Governor Dr Gideon Gono will not present his monetary policy review statement this month as expected, as he awaits the announcement of the supplementary budget and guidance from ongoing regional efforts on enhanced economic co-operation. The central bank governor also hinted that he needed more time to analyse policy implications and the way forward pertaining to the current Government initiatives on pricing structures. In a statement, Dr Gono said the decision was taken in consultation with the Minister of Finance, Dr Samuel Mumbengegwi, who gave his blessings.
In terms of the Reserve Bank of Zimbabwe Act, Chapter 22:15, Section 46, the central bank is required to issue monetary policy statements in December/January and June/July each year. The monetary policy statement will thus be issued on a date to be announced.
In April, Dr Gono was in Bulawayo where he presented an Interim Monetary Policy Statement as he sought to induce viability in all sectors of the economy while giving special attention to the man in the street and the rural folk.
The highlight of the Interim Monetary Policy Statement was the introduction of the Drought Mitigation and Economic Stabilisation Fund under which foreign currency holders now sell the United States dollar for $15 000, or 60 times the official exchange rate.
This was meant to mobilise foreign currency to alleviate the effects of drought.
Dr Gono also incentivised exporters through increasing foreign currency retention levels to 60 percent, a move that was roundly welcomed by the sector.
Yesterday Dr Gono said he remained optimistic that through concerted efforts by all stakeholders, the economy would soon return to a sustainable recovery and growth path.
"Through a focused spirit of working together, as Government, labour, business and civil society, we will ultimately turn around the fortunes of our economy, transforming current challenges into opportunities for a stable, growing and prosperous Zimbabwean economy," he said.
Dr Mumbengegwi is expected to present his supplementary budget within the next few days, against the backdrop of exhausted allocations by most line ministries, six months before the end of the fiscal year.
The expenditure overruns have been attributed to rising inflation while other economic commentators have also said ministries have yet to exercise the discipline required in ahyperinflationary economic environment.
Former Minister of Finance Dr Herbert Murerwa projected an expenditure of $4,6 trillion for 2007 but indications are that this figure has already been surpassed.
Furthermore, an inflation target of between 350 percent and 400 percent by year-end now seems unachievable.
Both the monetary policy statement and the fiscal review statement are expected to come up with practical measures to ameliorate the current challenges bedevilling the economy.
The two statements complement each other and are thus expected to give impetus to Zimbabwe’s economic turnaround efforts.
The battle against challenges such as inflation and foreign currency remains a thorn in the flesh but Dr Gono remains optimistic that this is a passing phase which will soon be history if Zimbabweans collectively work towards stabilising the economy.
The Ministry of Finance has remained mum on the date of the fiscal review statement but it is largely expected to be announced on or before July 31.