Zimbabwe sees 2019 budget deficit at 4 percent of GDP

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A street money changer counts South African Rands in Harare, Zimbabwe, May 5, 2016. REUTERS/Philimon Bulawayo

HARARE (Reuters) – Zimbabwe wants to reduce its budget deficit to 4 percent of gross domestic product in 2019, down from an 11.1 percent forecast this year through various expenditure cuts, Finance Minister Mthuli Ncube said on Thursday.

The deficit widened after President Emmerson Mnangagwa’s government cranked up spending by increasing public sector salaries and purchasing farming inputs for rural farmers ahead of a disputed July 31 presidential election.

Ncube told members of parliament during a pre-budget briefing that the government would stop the central bank’s quasi-fiscal operations such as providing direct funding for projects, review annual bonuses to the public service, cut foreign travel and perks for senior officials.

Ncube said the government would also partially sell or list its shares in telecoms, banking and mining companies it owns in a period of six to nine months from now.

Past efforts by former finance minister Patrick Chinamasa to rein-in spending under Robert Mugabe’s rule failed, partly due to lack of political support, analysts say.

Ncube is under pressure to push through the reforms needed to lift Zimbabwe’s stricken economy and attract foreign lenders.

Zimbabwe, which dumped its currency for the U.S. dollar in 2009, is facing acute dollar shortages, which has seen prices of imported goods, including medicines spiral in recent weeks.

Reporting by MacDonald Dzirutwe; Editing by James Macharia

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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