Govt Admits Policy Failures, Scraps Unbudgeted Subsidies

The government has acknowledged that its previous economic blueprints failed to achieve their intended objectives and is now pinning its hopes on its ambitious National Development Strategy 1 (NDS1) to cure the current economic ills.

Speaking during the post-Cabinet briefing on Wednesday, the Minister of Information, Publicity and Broadcasting Services Monica Mutsvangwa said NDS1 was the panacea to the country’s economic ills. She said:

Noting that previous economic blueprints, albeit with similar targets, have fallen short on implementation, NDS 1 is premised on the need for bold and transformative measures that will ensure the achievement of the country’s vision of an empowered and prosperous upper-middle-income society by 2030.

This framework is set to steer the economy on a growth trajectory averaging 5%, supported by a sustainable annual fiscal deficit target of around 1,2% of GDP [gross domestic product], exchange rate stability and single-digit inflation.

The NDS1 is the second blueprint launched by President Emmerson Mnangagwa’s administration, following in the footsteps of the Transitional Stabilisation Programme (TSP), which was launched in 2018 to run for two years but fell flat.

Mutsvangwa also said the government would do away with “unbudgeted subsidies” as they undermined fiscal consolidation objectives under the new policy. She said:

The nation is informed that consistent with the overarching goal of the National Development Strategy 1:2021-2025 (NDS 1), it has become necessary that a guiding framework with regard to subsidies be established.

Such a framework should ensure subsidies meet a specific public policy objective to remedy an identified market failure and are of the minimum size, necessary to achieve such an objective…

Subsidies that are being provided will have explicitly identified funding sources, with costs adequately quantified to determine fiscal sustainability.

More: NewsDay

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