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November 19, 2018

Zimbabwe pledges to curb spending, retire old civil servants

Zimbabwean Finance Minister Patrick Chinamasa reacts as he arrives to present his budget at Parliament in Harare, December 7, 2017. /REUTERS
Zimbabwean Finance Minister Patrick Chinamasa reacts as he arrives to present his budget at Parliament in Harare, December 7, 2017. /REUTERS

Zimbabwe's new government pledged on Thursday to re-engage with international lenders, curb spending and attract investors in order to revive its battered economy.

In the first budget since last month's removal of long-time ruler Robert Mugabe, Finance Minister Patrick Chinamasa also said the government would amend indigenisation laws.

This will limit a 51 per cent local ownership requirement to just the platinum and diamond sectors.

The laws were designed to increase black Zimbabweans' share of the economy but were opaque and open to abuse - to the detriment of foreign investor confidence.

"As we focus on recovery of our economy, we must shed misbehaviour and acts of indiscipline which have characterised the past," he told parliament.

To cut a budget deficit projected at more than 10 per cent of GDP this year, he said the government would retire all civil servants aged over 65 and close some overseas diplomatic missions.

Government spending ballooned under Mugabe - part of the patronage machine that kept him in power for 37 years - with more than 90 per cent of the budget going on civil servant salaries, leaving precious little for the investment needed to boost growth.

More on Zimbabwe: Mnangagwa gets first Sh15.7b loan to revamp Robert Mugabe airport

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