OWN CORRESPONDENT, Harare | Thursday 2.40pm
ZIMBABWE has holdings of foreign exchange cover less than one day’s imports, an opposition economist said said.
Opposition secretary for economic affairs, Eddie Cross, said the critical shortage of foreign exchange is a the result of “gross mismanagement.” “Against a normal target of two to three months of import cover, Zimbabwe presently has less than one day’s import cover in useable foreign exchange reserves, ” Cross told a news conference.
The opposition Movement for Democratic Change unveiled its social and economic policy which it hopes will turn around the economic crisis gripping the country. Cross said the solution to Zimbabwe’s economic woes lay in “sharp and sustained” reduction in government expenditure and “financial engineering,” involving privatisation and international assistance to restructure debt.
“The immediate solutions to the economic crisis lie in a comprehensive re-assertion of control over the budget,” said Cross. He said government expenditure is getting out of control with this year’s budget now forecasted to reach Z$160-billion. Planned expenditure was Z$109-billion.
“It’s totally out of control, and there is no evidence of government trying to bring it under control, and if that continues we will have financial bankruptcy,” Cross said.
The International Monetary Fund and western donor agencies have suspended financial aid to Zimbabwe mainly over disagreements over the financing of troops being sent to the Democratic Republic of Congo to back President Laurent Kabila against a rebel offensive. — AFP
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