Download treasury updates 28 march 2017

TREASURY UPDATES
IMF Mission to Zimbabwe: 2-9 March 2017
1. The Government of Zimbabwe, through the Ministry of Finance and
Economic Development, hosted the IMF Mission, from 2 to 9 March
2017.
2. The Mission was a follow up on the previous Mission undertaken in
November in 2016.
3. The purpose of the Mission was to assess economic developments
and progress the country is making in implementing policy reforms,
in the spirit of the re-engagement.
4. Both parties took note of challenges the economy faced in 2016,
especially the drought, which negatively affected agriculture and
power, with ripple effects on other sectors of the economy. As a
result, growth is estimated at 0.7% in 2016.
5. However, prospects for economic growth in 2017 look quite
positive, given the favourable rainfall pattern on agriculture and
firming international mineral prices.
6. Consequently, economic growth for 2017 was revised upwards from
1.7%, announced in the 2017 National Budget to 3.7%.
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SADC Peer Review Mission to Zimbabwe
7. A Tanzanian delegation visited the country from 5-12 February
2017, to assess the country’s economic performance under the
SADC Peer Review Mechanism.
8. The peer review process is a self-monitoring and assessment
mechanism made by individual Member States, enhanced by a
review by other Members States, with a view of achieving agreed
SADC Macroeconomic Convergence targets as well as to identify
risks to economic outlook and policy options to mitigate them.
9. The SADC Mission is still finalizing its report which will be presented
to the Peer Review Panel, comprising SADC Ministers of Finance and
Committee of Central Bank Governors.
10. The Review Mechanism is derived from Annexure 2 of the SADC
Finance and Investment Protocol, which seeks to provide for
Macroeconomic Convergence on the following targets:
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SADC Macroeconomic Convergence Targets
Convergence Target
Indicators
Primary Indicators
Average Inflation (annual rate %)
3-7%
Fiscal deficit/GDP (%)
Less than 3%
Public debt/GDP (%)
Less than 60%
Secondary Indicators
Current account deficit/GDP (%)
Less than 3%
Economic growth (Real GDP annual rate %)
Greater than 7%
Central Bank credit to Govt. (% of revenues)
Less than 5%
External reserves (months of import cover)
6 months cover
Domestic savings/GDP (%)
35%
Domestic Investment/GDP (%)
30%
Progress on Implementing the Interim Poverty Reduction
Strategy
11. The Interim Poverty Reduction Strategy (IPRSP), which was
launched on 26 September 2016, is already under implementation.
12. Total resource requirements for supporting IPRSP activities and
programmes during its life span, 2017-18, amounts to US$2.7
billion.
13. The 2017 National Budget, allocated a total of US$563 million
resources, towards IPRSP related activities.
14. Our Development Partners are also coming on board to complement
Government efforts on this programme.
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15. A monitoring programme has already been put in place and will
commence in April 2017, targeting all the ten provinces inclusive of
selected districts in each province.
Annual Budget Review 2016
16. In a bid to strengthen the outline of the Budget Statement
presentation as an instrument for enhancing accountability and
fiscal transparency, the Ministry of Finance and Economic
Development, starting with the 2017 National Budget, introduced a
streamlined
budget
statement,
which
is
consistent
with
international best practices.
17. In line with the above and as announced in the 2017 National
Budget Statement, the Ministry has formulated its first Annual
Budget Review for 2016, which provides a complete outturn and
analysis on macroeconomic and fiscal developments during the
entire year.
18. In addition to the Annual Budget Review, the Ministry will continue
to provide Quarterly Treasury Bulletins, capturing quarterly
macroeconomic
and
fiscal
developments,
as
well
as
the
consolidated Monthly Financial Statement, in line with the Public
Finance Management Act.
Zim-Treasury 31 March 2017
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