Ministry of Finance and Economic Development

The Ministry has been headed by various individuals since 1980. Below is a list of the respective ministers and the respective time periods.

• Tichaendepi Masaya (1980–1985)
• Bernard Chidzero (1985–1995)
• Ariston Chambati (1995-1995)
• Emmerson Mnangagwa (1995–1996) acting
• Herbert Murerwa (1996–2000)
• Simba Makoni (2000–2002)
• Herbert Murerwa (August 2002 to February 2004)
• Christopher Kuruneri (February 2004-April 26, 2004)
• Herbert Murerwa (26 April 2004 to 6 February 2007)
• Samuel Mumbengegwi (6 February 2007 – 2008)
• Tendai Biti (February 2009- July 2013)
• Patrick Chinamasa(11 September 2013 –October 2017 )
• Ignatius Chombo(October 2017-November 2017)
• Patrick Chinamasa (November 2017- September 2018)
• Mthuli Ncube (Sept 2018 - 2023, following the 23-24 August 2023 elections)

David Chapfika was deputy Finance minister at the time when the RBZ handed out farming implements under the Farm Mechanisation Scheme (2007).

Sylvester Nguni was Minister of Economic Development in 2007.

In September 2018, George Guvamatanga was appointed the permanent secretary in the Ministry of Finance and Economic Development following a restructuring of government ministries by Emmerson Mnangagwa's new administration.

Clemence Chiduwa was sworn in as Deputy Minister of Finance and Economic Development]] on 11 November 2019.^[2]

The wealth of Zimbabweans has, on average, declined since independence. GDP per capita touched $1,540 in 1980, despite being suppressed by 15 years of war. This crept up to $1,690 by 2001, a poor performance given the inflow of aid and the end of sanctions. Then began a precipitous fall to $824 by 2008. By 2013, it had increased to $1,422, after which it fell again to $1,290 by 2021. Now (2023) Zimbabwe is in per capita income terms where it was in 1972. ^[3]

Vision and Mission of the Ministry

Among other attributes, the Ministry of Finance in Zimbabwe endeavours to "be the centre of excellence in macro-economic policy formulation, coordination and stewardship of public resources to achieve sustainable socio-economic growth and development. To formulate and coordinate sound macroeconomic policies, effectively mobilise, allocate, manage and account for public resources."^[4]

Roles of the Ministry in Government

• To manage the Consolidated Revenue Fund, the National Development Fund and the public debt portfolio;
• Formulate and administer the National Accounting Policy;
• Formulate and administer the National Budget;
• Design and implement up to date and effective systems of internal check and control;
• Mobilise financial resources to finance Government Programmes;
• Facilitate and participate in the negotiations related to domestic and international mobilisation of resources;
• Collect revenue due to Government, in particular through the Zimbabwe Revenue Authority (ZIMRA);
• Analyse the performance of public enterprises and advise on matters of financial policy;
• Carry out macro-economic reviews and recommend policies that promote macro-economic stability necessary for sustainable economic growth and development;
• Give policy guidelines to the Reserve Bank of Zimbabwe;
• Administer the National Economic Conduct Inspectorate;
• Administer the Zimbabwe National Statistics Agency."^[4]

Departments in the Ministry of Finance

• Accounts General- This department under the Ministry of Finance handles the government accounting services; that is recording, documenting and tracing the national incomes and expenditure. It also includes the Consolidated Accounts. This department also helps in the administration of state parastatal accounts. Other Departments are as follows;
• Budgets- It majors in expenditure and public its run the Public Sector Investment Programme
• Finance and Taxation- This department manages domestic and international finance, revenue and tax policy.
• Debt Management Office- Majors in resource mobilisation, risk management as well as financial settlements and disbursements.
• Fiscal Policy and Advisory Services
• Expenditure Department;
• Revenue Department;
• Domestic and International Finance;
• Finance, Administration and Human Resources;
• Implementation and Control of Expenditure Unit;
• National Economic Conduct Inspectorate;
• Zimbabwe Statistical Agency;
• Internal Audit; and
• Legal Services.^[5]

Policies

STERP

In 2009, the Ministry of Finance under the leadership of Tendai Biti came up with a policy document which was called STERP (Short Term Economic Recovery Programme). STERP was "an emergency short term stabilisation programme, whose key goals are to stabilise the macro and micro-economy, recover the levels of savings, investment and growth, and lay the basis of a more transformative mid -term to long term economic programme that will turn Zimbabwe into a progressive developmental State." ^[6]

STERP 2

STERP 2 was a continuation and follow up policy to the initial STERP blueprint. "The short-term nature of STERP meant that some programmes and projects would not be fully implemented within the time frame of nine months. Hence, continuation of all such programmes beyond 2009 was implied from the onset in their design, resource requirements and implementation scope."^[6]

Zimbabwe Staff Monitored programme

This was a programme initiated by the United Nation Economic Development organ which was meant to facilitate economic development

Zim Asset

The Zim Asset developmental policy was crafted in 2013 as part of the ZANU PF party campaign manifesto before the harmonised 2013 elections. The policy was eventually adopted by the government as a national policy in October 2013 after Robert Mugabe had won the controversial election. Patrick Chinamasa the minister of finance was responsible for campaigning in the cabinet for adoption of the document as national developmental initiative.

Criticism

The Ministry of Finance was accused of failing to manage the country's fiscal especially during the period of hyper-inflation from 2002 to 2009. During this period, the government introduced different notes as part of its policy to avert cash challenges faced by the banks. The then governor of the Reserve Bank of Zimbabwe Gideon Gono was accused of failing to bring lasting solutions to the challenges that were bedeviling the country. Zimbabwe at one point in time was the only country in the world where everyone was a millionaire due to the extreme hyper-inflation which had rocked the country. It was only in 2008 when the Ministry of Finance introduced a multi currency system but the impact of inflation had already affected all sectors of the country. However with the coming of the Government of National Unity in 2008, the Ministry of Finance under Tendai Biti managed o make commendable progress in areas of recapitalisation of government ministries, parastatals, local authorities and key institutions such as education and health ministries. In 2014, the Ministry of Finance through the Reserve Bank now headed by John Mangudya intoduced Bond Coins. This, according to the governor was meant to ease change problems since there was shortage of lower denominations of the Rand and the United States Dollar. However the move was criticised due to bad timing; critics argued that this was a very slow reactions since the problems of change started in 2007 when the US dollar began to infiltrate the local economy.

Events

In February 2023, three men were arrested after being found in possession of fake US dollar notes comprising of 26x USD50, 37x USD20, and USD10 in Bulawayo. Obedience Muza (23), Nixon Matienga (37) and Liberty Madzivanyika (33) were arrested by detectives acting on a tip-off. Later investigations conducted by the police revealed that the three had a printer and paper used to print the fake notes. ^[7]

Foreign Currency Auction System

Delays in foreign currency payments to companies under the Reserve Bank of Zimbabwe auction facility, of up to two months, caused alarm, and led to a court case in June 2021. The foreign currency auction system, introduced in 2020 by the central bank was hailed as a ‘game-changer’ in alleviating shortages of forex and boosting transparency and efficiency in the foreign currency market. However, during the Wednesday National Assembly question-and-answer session, MPs accused government of lying that it had disbursed money to the affected companies, adding that some of them had gone for a month without getting their dues. Harare North MP Rusty Markham] (MDC Alliance) said: “Last week, we were told by the Deputy Minister of Finance (Clemence Chiduwa) that all the money due from the auction system had been paid. Has this, indeed, happened, and have the banks paid their customers? What is government policy to ensure that customers are given the allocations they applied for?” Markham said in his research with big banks, he discovered that they were eight weeks behind in the allocation of foreign currency through the facility. But Dzivarasekwa MP Edwin Mushoriwa (MDC Alliance) said government had given the impression that all was in order in the foreign currency auction system.

Leader of government business in the National Assembly, Justice minister Ziyambi Ziyambi in response said government policy was that those accessing the funds through the facility would be notified by their banks.
Speaker of the National Assembly Jacob Mudenda ruled that the Finance minister should investigate the problems and ensure corrective action is taken to deal with the delays. ^[8]

Devolution

On devolution, Combined Harare Residents Association (CHRA), Community Water Alliance (CWA) and Member of Parliament Rusty Markham went to court in 2023, and in October, the High Court ordered that:

Any or all of the respondents shall, within a period of six (6) months, that is to say, by 31 March 2021 submit a bill or Bills for gazetting by the Parliament of Zimbabwe which Bill or Bills will give effect to an Act of Parliament governing the devolution of powers as contemplated in Chapter 14 of the Constitution of Zimbabwe.

The Minister of Local Government Rural and Urban Development was the first respondent with the Minister of Justice Legal and Financial Affairs being the second respondent the Minister of Finance and Economic Development was the third respondent.
The matter was presided over by Justice Mushore. Residents were represented by Mr Tendai Biti, a member of Zimbabwe Lawyers for Human Rights. ^[9]

As of March 2023, none of the respondents had complied with the court order, meaning all the government ministers were in contempt of court.

Pomona Dump deal

A CoH Councillors investigation into the Pomona Dump deal, has revealed that it would cost the City of Harare over US$1 billion while the city would derive revenue of US$60.39 million from the sale of electricity. The total cost of the project to City of Harare over the period of 30 years period will be US$1 002 202 001.65.

The report showed that the City of Harare was not allowed full involvement in the deal which was imposed on Harare by the Local Government ministry. The contract was evaluated by the Public Private Partnership (PPP) unit in the Finance ministry. And due diligence was not followed in awarding Geogenix BV, formerly Integrated Energy BV, the contract to operate the Pomona dumpsite. The PPP unit was established in the Ministry of Finance and Economic Development by section 34 of the Zimbabwe Investment Development Agency Act [Chapter 14:37]. ^[10]

Blended Inflation 2023

Finance Minister, Mthuli Ncube was challenged in Parliament in May 2023 to provide a detailed explanation before Parliament about Statutory Instrument 127 and blended inflation. Speaker of the National Assembly Jacob Mudenda said Ncube should appear before Parliament to explain SI 127.

SI 127 of 2021 amends the Exchange Control Act and the Bank Use Promotion Act, imposing heavy administrative penalties for breaches of special provisions of the Act. The SI prohibits businesses from selling goods and services or quoting them at an exchange rate above the foreign currency auction system rate. It also punishes businesses for issuing clients with Zimbabwean dollar receipts for payment received in foreign currency. The SI has been viewed as an attempt to curtail the exchange rate on the parallel market to stabilize the local currency. However, business leaders view it as a regulation that could lead to shortages of goods and akin to price controls (cost-push inflation).

Blended inflation is a method used to calculate inflation by taking into account both foreign and domestic currencies in countries with multiple currencies in circulation. The Reserve Bank of Zimbabwe uses this method to measure the rate of inflation by converting prices of goods and services into a common currency, such as the US dollar. The prices are then aggregated and weighted to calculate inflation. Although blended inflation is considered more accurate than using a single currency, it can also mask the impact of inflation on specific sectors of the economy, which can lead to a distortion in the inflation data. Therefore, the use of blended inflation can be controversial. ^[11]

References