ZIMBABWE: Painful reforms” are necessary to get out of economic stagnation – President Mnangagwa

Zimbabwe’s President Emmerson Mnangagwa has defended his economic policy, saying “painful reforms” are necessary to get the southern African country out of economic stagnation.

“Yes, the medicine is harsh, but the patient requires it in order to live,” Mr Mnangagwa said, quoting former British Prime Minister Margaret Thatcher, in an article in theFinancial Times.

He said that his administration had identified privatisation of state institutions, broadening of the tax base and fighting corruption as key to turning the economy around.

He also defended a levy imposed on electronic transactions:

Quote Message: Governments do not only cut. They must also collect. As part of an effort to broaden the tax base, we recently introduced a 2% levy on electronic transfers, which make up around 96% of all financial transactions. Collecting revenue effectively and efficiently, combined with cuts and privatisation, will enable us to cut the budget deficit.”

The 76-year-old president, who won elections in July after Robert Mugabe’s forced resignation last year, said Zimbabwe faced acute problems, but, echoing Mrs Thatcher, added: “We are not afraid of taking tough, and at times painful, decisions.”

He highlighted increasing output in gold mines and privatisation of the agriculture sector as some of the positive developments in Zimbabwe since he came to power.

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