THE GRZ/IMF STAFF LEVEL AGREEMENT (SLA) AND RELATED MATTERS – YOUR QUESTIONS ANSWERED.
The Ministry of Finance and National Planning has recently received requests for explanations and responses.
We now wish to share our responses to the most frequently asked questions on the GRZ/IMF Staff Level Agreement (SLA) and related matters.
THE GRZ/IMF STAFF LEVEL AGREEMENT (SLA) AND RELATED MATTERS – YOUR QUESTIONS ANSWERED.
The Ministry of Finance and National Planning has recently received requests for explanations and responses.
We now wish to share our responses to the most frequently asked questions on the GRZ/IMF Staff Level Agreement (SLA) and related matters.
QUESTION 1
My question on behalf of a common man: Apart from the Macroeconomic conditionality which are actually in line with Government’s stance on its 2022 macroeconomic objectives, are there any other hidden conditionality we must expect from the IMF deal? This arises from the fact that we have heard a lot of sentiments from Government officials concerning the removal of fuel & electricity subsidies.
RESPONSE
There are no hidden conditionalities being requested by the IMF. Government and the IMF have focused on the need for the whole public sector to curtail inefficient public expenditure, including in State Owned Enterprises (SOE’s) and Agencies. The two parties have agreed that rationalising where and how the Government spends public resources is an important part of the economic transformational agenda.
In this regard, the removal of subsidies will facilitate an important shift in spending from poorly targeted subsidies towards greater investment in health, education, and the delivery of more social benefits such as:
1) Enhanced allocations for the Constituency Development Fund – meaning that more schools, desks, clinics, water bore holes, etc. will be available for rural communities;
2) Paying off all outstanding pension arrears – some beneficiaries have been waiting for several years for their retiring benefits; and,
3) Hiring of 30,000 teachers, hiring of 11, 000 health personnel, introduction of a bursary scheme and elimination of tuition fees for secondary school education, etc.
Subsidy removal is a measure that will enable realignment of public expenditure from poorly targeted choices such as fuel, to enhanced investments in health, education, and social protection, as outlined above. The outcomes favour our society’s less privileged.
The Government is also working on measures to streamline the licenses and permits required by businesses, in order to further improve the business environment.
It is also important to note that although the Government will continue to support small-scale farmers through the implementation of the Farmer Input Support Programme, the facility will be re-assessed to a