2009 Budget Proposals

Reduce inflation to 2 digit figure and realise Economic Growth of 2% in 2009

Rather ambiguous given the degree of collapse of the economy and work needs to be done
Total Revenue to be estimated at 30% of GDP(US$5.5billion)

US$1.7 billion

Dual currency (use of multiple foreign currency alongside the ZWD)

ZWD Revaluation

CSO adoption of US$ Statistics in Inflation calculations

Dollarization has been formalised

A stop on the Quasi fiscal expenditures

Help to rein inflation, however policy consistence remains to be seen

Remuneration of Public Servants in Foreign currency starting February 2009

Voucher (problem in determining consumption pattern of consumers)

Move away from Voucher system if inflows permit

Allows the private sector to follow suit

Exchange is expected to be market determined

Complimenting fiscal policy

Insurance

Given licences to charge in foreign currency

7.5% of US$ assets in PA (long term insurance)
5% of US$ assets in PA( short term insurance)
10% of US$ assets in PA( pension funds)

Local currency

Ratios of 35%,30% and 25% remain in place

High appetite for US$ PA paper

Cash rich

ZSE Trading

Measures to be put in place soon to trade in foreign currency
Activity likely to be depressed as national savings level still depressed

Local Authorities to charge in Foreign currency

NOCZIM

ZESA

US$0.098kWh
Farmers , pay 80% of the tariff

ZINWA

Management of water to local authorities (1 Feb 2009)
Effective and possible efficiency to be realised