Government Measures to Address Budget Deficit in 2025: Mthuli Ncube’s Strategy
Zimbabwe Government Announces Measures to Address Budget Deficit in 2025
In a bid to tackle the projected budget deficit for 2025, the Zimbabwean government has unveiled a series of measures that include increased taxation, asset sales, and the issuance of new securities. The budget deficit is estimated to be ZiG8.5 billion, equivalent to 1.5 percent of GDP, with revenues projected at ZiG103.17 billion and expenditures at ZiG111.68 billion.
Finance Minister, Professor Mthuli Ncube, outlined the government’s strategy, which includes accelerating joint ventures with state-owned enterprises (SOEs), exploring the sale of non-core assets, and issuing new securities such as green bonds, social bonds, diaspora bonds, and debt swaps on the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX).
ZSE Chief Executive Officer, Justin Bgoni, expressed confidence in the local market’s readiness for these new instruments, highlighting ongoing collaboration with the government. The government also plans to broaden the tax base by automatically registering small and medium enterprises for tax purposes and including cross-border online transactions in the tax net.
While some economists have praised the government’s proactive approach, others have raised concerns about the impact of external factors like El Niño and global commodity price fluctuations on key sectors such as agriculture and mining. There are also reservations about the government’s focus on increasing revenue through taxation and selling off assets to finance the budget deficit.
Analysts emphasize the importance of careful debt management, expenditure cuts, and legislative protections for investors to ensure long-term economic stability. The success of these measures will depend on effective implementation and the ability to attract investor confidence in Zimbabwe’s economy.
Overall, the government’s proposed measures aim to address the budget deficit, but their success will hinge on prudent management and strategic decision-making in the face of economic challenges.
