- February 2, 2020
- Posted in LOCAL
GOVERNMENT has set aside $8,5 billion to support electricity generation and imports this year as part of efforts to improve power supply and ease load shedding.
A further $500 million will be injected into the economy in the first six months of this year to reduce demand for cash, which has seen some citizens turning to illegal cash traders where they are charged premiums of up to 40 percent.
This was said by Finance and Economic Development Minister Professor Mthuli Ncube, yesterday as he unveiled Government’s key plans for the year.
Prof Ncube said it was the Government’s desire this year to ensure the stability of the local currency, maintain low prices on basic goods and services, create jobs for young people and improve household food security.
He conceded that 2019 was difficult and characterised by price increases in fuel, basic commodities, and electricity.
However, the price increases did not match salary increments, leaving many employees, both in the public and private sectors, living below the poverty datum line.
Said Prof Ncube: “An additional $500 million in notes and coins will be put into the economy in the first six months of 2020. We expect this to ease the demand for physical cash and you won’t be ripped off by money dealers who sell cash at various percentage mark up prices.”
Mobile money agents and those connected to people who have access to money, sell physical cash at premiums of between 30 percent and 40 percent, robbing citizens of their hard-earned money.
The Reserve Bank of Zimbabwe (RBZ) introduced new $5 and $2 notes and $2 coins in a bid to alleviate shortages of physical cash, but access to the money in banks remains a challenge amid reports that some bank employees were diverting it to street dealers who sell at premiums.
But as more cash is pumped into circulation, Prof Ncube said maintaining the value of the Zimbabwe dollar’s exchange rate is important to ensure prices of basic commodities remain stable.
He said the central Government was living within its means and has put in place deliverables to stimulate production and exports.
Increased production is one of the Government’s primary targets this year, to generate more foreign currency, product availability, and job creation.
Prof Ncube said youth employment also tops Government priorities, and the establishment of the $500 Youth Employment Tax Incentive to support employers who generate jobs for youths.
Any additional job created will attract a percentage tax credit to the employer.
YETI is designed to reduce the employers’ cost of hiring young people through a cost-sharing mechanism with the government.
To increase economic opportunities and participation by youths in national development, the National Venture Capital Fund has been created and will be capitalised in both local and foreign currency, to incorporate financing start-up projects of youth with preference being given to targeted areas in the context of the Local Content Strategy.
Turning to electricity security, Prof Ncube said $8,5 billion had been set aside to improve Zesa’s output.
Some of the money would be channelled towards electricity imports mainly from South Africa and Mozambique.
“Availability of power is expected to increase as more independent power producers (IPPs) come on line,” said Prof Ncube.
The government also plans to give incentives to companies that decide to go off-grid and install solar.
Many companies are now deploying solar power for their operations on the back of erratic supplies from Zesa.
Yesterday, the Zimbabwe Energy Regulatory Authority (Zera) announced it had received applications from RioZim Limited to construct, own, operate and maintain a 68,4MW solar plant at Murowa Diamond Mine in Mazvihwa Communal Lands in Zvishavane District.
RioZim also wants to set up another 38,04MW solar plant at Renco Mine in Nyajena Communal Lands, Masvingo Province, and two 54MW solar plants at Cam & Motor Mine; and Dalny Mine, both in Kadoma, Mashonaland West Province.
The Standards Association of Zimbabwe (SAZ)’s head offices are already powered by solar after it invested in a 194kW solar car park.
Declining water levels in Lake Kariba and failure to refurbish thermal power stations when they fall due, has seen power generation declining, resulting in massive load shedding.
The mining and manufacturing sectors have been negatively affected by load shedding.
Turning to food security, Prof Ncube said no Zimbabwean should go hungry, as imports of maize, wheat and soya beans will be stepped up this year.
This year, the Second Republic wants to embark on massive infrastructure projects targeting schools, roads, and schools, among others, in the drive to achieving Vision 2030, of an upper-middle-income economy.
Prof Ncube said Zimbabwe was destined for prosperity in line with President Mnangagwa’s aspirations.