Zimbabwe’s Government is reforming its fiscal policy to enhance macroeconomic stability and promote sustainable growth, as outlined in the World Bank’s Public Finance Review. The report identifies strategies to increase revenue and improve spending efficiency from 2019 to 2023. Key recommendations include stabilizing prices, optimizing tax systems, and enhancing public service efficiency.
The Government of Zimbabwe is implementing reforms to restore macroeconomic stability through stronger fiscal policy, as emphasized in the World Bank’s Public Finance Review (PFR) released today. This review analyzes public finance from 2019 to 2023, aiding Zimbabwe’s fiscal consolidation by suggesting policies for better revenue generation and expenditure management. Ultimately, these measures aim to foster economic growth and job creation while ensuring fiscal sustainability.
The PFR outlines strategies to enhance fiscal space and optimize fiscal accounts, crucial for Zimbabwe’s economic trajectory. Key recommendations include stabilizing prices and correcting exchange rate distortions to recover significant revenue losses from monetary issues. Notably, over $4.5 billion was lost due to such distortions from 2020 to 2023, indicating that improved price stability is vital for recovering inflation-related tax revenue.
The PFR suggests several reforms to boost equitable tax revenue, such as refining corporate tax benefits and enhancing taxation in mining, property, and wealth sectors. Aligning health excise taxes with global standards and modernizing tax administration through digital technologies are also pivotal steps for efficient revenue mobilization. These fiscal measures aim to create an environment conducive to both economic stability and inclusive growth.
Enhancing the efficiency of public expenditure is critical for long-term fiscal consolidation and sustainable economic growth. Optimizing government spending and investment in healthcare and infrastructure can improve value-for-money aspects. Moreover, transforming procurement processes through e-Procurement offers significant savings opportunities, while review reports highlight potential civil service streamlining to improve governance efficiency.
Furthermore, developing a national “social registry” can significantly enhance the targeting of social protection systems, thereby improving the impact of public spending on vulnerable populations. The PFR underscores fiscal policy as a cornerstone for macroeconomic stability, asserting the need for a reliable national budget and a stable currency for promoting growth and reducing poverty effectively.
The World Bank’s Public Finance Review outlines crucial reforms to Zimbabwe’s fiscal policy, focusing on improving revenue generation and expenditure efficiency. By addressing monetary distortions and enhancing governance, Zimbabwe can attain macroeconomic stability essential for sustainable growth and poverty reduction. The emphasis on a robust fiscal framework is pivotal for achieving long-term economic objectives and creating a healthier socio-economic landscape.
Original Source: www.miragenews.com
