The ZWL$18 billion Economic Rescue and Stimulus Package unveiled by government to support all sectors of the economy faces an ignominious failure due to strategic mistakes by the President Mnangagwa administration.
Experts say the package, which is also aimed at cushioning small scale industries, improve health facilities, reduce poverty and assist vulnerable members of society, is set for failure as it lacks basic fundamentals needed for its success.
The Zimbabwe Coalition on Debt and Development (ZIMCODD) say though the decision was noble, “there are many issues to consider which determine the ability of the state to fund the package”.
Key considerations which inform the negative perception about the package include the lack of consultation as the programme “was imposed on the stakeholders”.
“The government did not consult the stakeholders including the beneficiaries of the proposed package”.
“The stimulus package is not informed by any research. If there is any research done to that effect, it is not in the public domain”.
ZIMCODD also raised issues with the country’s “indebtedness and unavailability of reserves” which limit the financing options at the disposal of the government.
Currently 73% of external debt is in arrears thus external creditors are not likely to extend additional lines of credit.
Another factor which makes the package a piece of fictional grandiosity is the constrained fiscal space which has seen ZIMRA ‘only managing to collect ZWL$13.88 billion during the first quarter ending 31 March.
According to the experts this means ‘government would need to raise ZWL$18 billion in 5 months”, which is nearly impossible.
The crashing of the local currency, now trading at over ZWL$65 to the US$ means the package has lost a lot of value and preferably should have been benchmarked in the US dollar.
The scourge of corruption in the disbursement and use of any money released under the package also stifles any hope at impact of the program on the intended beneficiaries.