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(NEWZIMBABWE) South Africa backs Zimbabwe recovery

South Africa backs Zimbabwe recovery
21/09/2012 00:00:00
by News24

SOUTH Africa will continue helping Zimbabwe in its economic recovery programmes, finance ministers of the two countries said on Friday.

"South Africa further committed itself to continue supporting Zimbabwe's efforts to normalise its relations with multilateral financial institutions," the ministers said in a joint statement.

The statement followed a meeting in Pretoria between South African Finance Minister Pravin Gordhan and his Zimbabwean counterpart Tendai Biti, aimed at deepening co-operation between the two governments.

The discussions were centred on the resolutions of the extraordinary summit of the Southern African Development Community (SADC) heads of states held in Swaziland in 2009.

The resolutions were to provide support to Zimbabwe's Short Term Economic Recovery Programme (Sterp).

At that summit, South Africa pledged to help Zimbabwe through budget support grants, a line of credit and export credit facilities.

Gordhan and Biti recognised Zimbabwe's positive recovery from a period of hyper-inflation and the successful implementation of Sterp, the statement said.

However, both ministers noted that the country continued to face significant economic constraints, including cash flow challenges arising from revenue collections that were below target, a high debt over-hang, and uncompetitive business environment.

Other challenges were infrastructural deficits and limited access to lines of credit for business.

The ministers acknowledged that Zimbabwe had been undertaking reform measures to achieve fiscal sustainability and overall economic recovery.

The measures included increase in fuel taxes coupled with the incorporation of the Zimbabwean Revenue Authority (Zimra) into the diamond value chain, as well as closing tax loopholes and slippage.

Budget processes had been strengthened to improve support for fiscal management, planning and control of spending.

Both ministers agreed that Zimbabwe would receive the facilitation of a line of credit, and further budget support which would be aligned to South Africa's 2012 budget process.

Development finance institutions would also be encouraged to participate, including the Development Bank of Southern Africa, in order to invest in infrastructure projects, particularly energy and roads.

Collaboration would be strengthened between the SA Revenue Service and Zimra, with particular focus on the harmonisation of customs systems, procedures and investment in Beitbridge border post infrastructure.

Labels: PRAVIN GORDHAN, STERP, TENDAI BITI

posted by MrK @ 5:11 AM