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Uphill task for Zim finance minister as economy bleeds

Harare - Zimbabwean Finance Minister Patrick Chinamasa must be a worried man, especially as he presents the country’s mid-term fiscal policy statement on Thursday, weighed down by an economy that has continued to struggle.

On Wednesday Chinamasa appointed a new board to head the central bank, saying he now has confidence in the bank's efforts to turn around the country's struggling economy.

Reserve Bank of Zimbabwe governor John Mangudya will table his mid-term monetary policy on Wednesday next week. He, just like Chinamasa, must be a worried man as he has to breathe life into a financial sector crying out for intervention.

"It's a tight situation which calls for even tougher measures. The time has come for the government to focus on putting in place measures and policies that will avert continued economic meltdown," said economist Moses Moyo.

Other analysts said the government will likely entrench its protectionism policy for local industries such as agriculture and manufacturing.

Other measures experts are expecting Chinamasa to address include clarity on export levies for unbeneficiated platinum and potential lowering of royalties for some minerals, especially as mineral prices have remained subdued.

To further worsen matters ahead of the fiscal and monetary policy reviews on Thursday and next week, the Zimbabwean state revenue authority on Wednesday said tax collections for the first half-year had missed targets.

READ: Zim misses revenue target as economy stutters

Zimbabwe is battling company closures, slowing productivity and massive job losses.

Willia Bonyongwe, chairperson of the Zimbabwe Revenue Authority, said on Wednesday that first-half tax collections at $1.66bn were lower than projections of $1.76bn.

Revenues were dragged down by subdued mining royalties and lower corporate tax collections as the corporate sector continues to struggle.

Zimbawe’s economy has become heavily reliant on mining and tourism but the resource sector is struggling, hit by persistently lower commodity prices.

Mining royalties were US$39.8m, about 39% below target and 65% lower compared to the same period last year.

"The performance of the revenue head (mining royalties) can be attributed to depressed international mineral prices," said Bonyongwe.

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