【世界银行】津巴布韦公共财政评论：通过财政政策锚定宏观经济稳定-2025.2_118页_8mb

Zimbabwe Public Finance Review Summary

Core Content

This report, Zimbabwe Public Finance Review, focuses on how Zimbabwe can achieve macroeconomic stability through fiscal policy reforms. It highlights the urgent need for fiscal consolidation, which includes expenditure rationalization and increased domestic revenue mobilization, to address the country's growing public debt and unsustainable fiscal practices. The report is part of the Structured Dialogue Platform (SDP) for Arrears Clearance and Debt Resolution, which aims to restore macroeconomic stability and re-engage Zimbabwe with the international community.

Main Viewpoints

• Fiscal Space and Debt Sustainability: Zimbabwe faces a large, unsustainable debt burden. The country's fiscal deficits have grown significantly, particularly in 2023, driven by external arrears, legacy debt, and the absorption of the Reserve Bank of Zimbabwe (RBZ) debt. The transfer of RBZ's external debt to the Treasury has created a significant financing gap.

• Macroeconomic Instability: High inflation and rapid exchange rate depreciation have severely impacted public finances. The RBZ's quasi-fiscal operations (QFOs) through money creation have historically contributed to these issues. Removing monetary and exchange rate distortions is essential for restoring price and exchange rate stability.

• Expenditure Rationalization: Public spending is inefficient and often not aligned with long-term growth and equity goals. The wage bill, which accounts for over 40% of expenditures, has become a major source of fiscal rigidity due to inflation and exchange rate fluctuations. Rationalizing the wage bill, improving public investment management, and enhancing procurement efficiency are key to reducing fiscal risks.

• Revenue Mobilization: Domestic revenue mobilization is critical for funding the government's operations and reducing reliance on external borrowing. The report outlines several opportunities to increase revenue, including removing VAT exemptions, improving tax administration, and increasing excise taxes on tobacco, alcohol, and sugar-sweetened beverages (SSBs).

• State-Owned Enterprises (SOEs): SOEs are a significant source of fiscal risk and contingent liabilities. The report suggests improving transparency, financial reporting, and oversight to reduce these risks.

• Social Protection and Equity: Social protection spending is not adequately targeted, leading to high exclusion and inclusion errors. A national "social registry" could improve targeting and efficiency, while also enhancing climate resilience.

• Medium-Term Fiscal Sustainability: The report emphasizes the need for a durable fiscal consolidation strategy to ensure Zimbabwe's long-term fiscal sustainability. This includes a combination of expenditure rationalization, revenue mobilization, and policy reforms to stabilize the macroeconomic environment.

Key Recommendations

1. Macroeconomic Stabilization

• Remove monetary and exchange rate distortions: This would enable low and stable inflation, and a competitive exchange rate.
• Reverse the trend of informalization: Address macroeconomic and administrative obstacles that contribute to informalization, such as high parallel exchange rate premiums and cumbersome tax compliance for SMEs.
• Reform the Intermediate Money Transfer Tax (IMTT): Make it tax-deductible for formal companies to incentivize formalization.

2. Expenditure Rationalization

• Establish a national "social registry": Improve targeting of social protection systems and enhance climate resilience.
• Ensure a fiscally responsible wage bill: Eliminate duplicative and redundant positions in the public service in line with the GoZ jobs evaluation report.
• Improve value-for-money in procurement: Implement eProcurement and standardized price lists to increase efficiency.
• Strengthen public investment management (PIM): Improve appraisal processes to prioritize and select capital projects.
• Improve SOE transparency and oversight: Ensure timely financial reporting and effective oversight to limit fiscal risks.

3. Domestic Revenue Mobilization

• Remove VAT exemptions and zero-rating: Increase revenue collection while ensuring compensation for low-income households.
• Publish the fiscal cost of CIT tax incentives: Rationalize tax incentives and improve transparency in the annual budget.
• Strengthen mining tax collection: Simplify transfer pricing safeguards, manage excess interest deductions, and improve the international tax treaty framework.
• Raise excise tax rates on tobacco, alcohol, and SSBs: Align with WHO standards and continue the SSB tax.
• Strengthen property tax systems: Improve housing registration, implement computer-aided mass appraisals, and introduce digital billing and payments.
• Accelerate the rollout of the Tax and Revenue Administration System (TaRMS): Focus on taxpayer registration, especially for the informal sector.

4. Medium-Term Fiscal Sustainability

• Implement a durable fiscal consolidation strategy: Combine expenditure rationalization and increased revenue mobilization to achieve sustainable fiscal outcomes.
• Strengthen budget credibility: Improve budget execution and enforcement of Public Finance Management (PFM) regulations.
• Enhance accountability and transparency: Strengthen financial reporting and audit processes to ensure compliance with PFM laws.

Conclusion

The report underscores the importance of fiscal policy in anchoring macroeconomic stability and promoting long-term growth and equity. By addressing the root causes of fiscal imbalances and implementing targeted reforms, Zimbabwe can move towards a more sustainable fiscal pathway. These reforms are critical for restoring public finances, reducing fiscal risks, and re-engaging with the international community for affordable external credit lines and investment opportunities.