Zimbabwe budget woos foreign investors after fall of Mugabe

Lester Mason
December 7, 2017

These could include repealing or making significant changes to the indigenisation law, which requires foreign investors to part with majority shares. He unveiled spending cuts including the closure of some diplomatic missions.

Chinamasa said the new government is aiming for a 2018 budget deficit of below 4 percent of GDP, which some analysts said was an ambitious goal at a time when the country is expected to hold a national election. But in Thursday's budget announcement, Mr Chinamasa said the law would apply only to the platinum and diamond sectors from now on. At present, more than 90% of government expenditure goes to pay civil servants' salaries.

The financing agreements are the first to be signed by Zimbabwean President Emmerson Mnangagwa's new administration and are a fulfillment of some of the projects agreed between Zimbabwe and China during Chinese President Xi Jinping's visit in 2015.

"The major (cost-saving) measures are good but are not robust enough for the government to create enough savings to help it meet its budget requirements", Harare-based economist Gift Mugano told Reuters.

"The unsatisfactory performance of the economy is being underpinned by declining domestic and foreign investor confidence levels, against the background of policy inconsistencies in an uncertain and uncompetitive business environment", Chinamasa said.

Mnangagwa has taken over power from Robert Mugabe after he was ousted from office by the military last month. Former leader Robert Mugabe resigned two weeks ago after an army-led coup ended his 37-year rule in which agricultural output collapsed due to forced repossessions of commercially productive farmland. Zimbabwe ranks 154th out of 176 countries in Transparency International's Corruption Perception Index.

Other reports by Iphone Fresh

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