Latest news with #PublicFinanceReview
Zawya
26-02-2025
- Business
- Zawya
Anchoring Macroeconomic Stability Through Fiscal Policy in Zimbabwe
The Government of Zimbabwe recently embarked upon an important set of reforms aimed to durably restore Zimbabwe's macroeconomic stability. To secure these reforms, it is key for the Treasury to identify ways to strengthen its fiscal policy to help move Zimbabwe towards a sustainable medium-term fiscal pathway, according to the new Public Finance Review (PFR) released by the World Bank today. The PFR titled ' Anchoring Macroeconomic Stability through Fiscal Policy ' considers the performance of Zimbabwe's public finances between 2019 and 2023. In addition, it supports the Government of Zimbabwe in its fiscal consolidation efforts by identifying policy options to improve expenditure and revenue mobilization to create fiscal space, improve efficiency, and strengthen equity considerations. This can help move Zimbabwe towards a more sustainable medium-term fiscal pathway, stabilize the macroeconomic environment, and support sustainable economic growth and job creation. "The PFR emphasizes the World Bank's commitment to providing timely and responsive support to the Government of Zimbabwe and is a testament to our strong and ongoing partnership. This comprehensive analysis of public finance will guide our efforts to assist the government in improving domestic revenue mobilization, enhancing efficiency, and ensuring pro-poor outcomes," said Eneida Fernandes, World Bank Country Manager for Zimbabwe. The PFR recommends several measures to create fiscal space and return Zimbabwe's fiscal accounts to a prudent trajectory. The report highlights that stabilizing prices and eliminating exchange rate distortions can significantly and swiftly boost government revenue. The World Bank's analysis indicates that Zimbabwe's treasury lost over $4.5 billion between 2020 and 2023 due to monetary distortions. Enhancing price stability could help recover inflation-related tax losses promptly. Potential reforms to increase tax revenue efficiently and equitably include streamlining corporate tax incentives, strengthening mining, property and wealth taxation, aligning health excise taxes in line with international standards, and improving tax administration using digital technologies. Improving the efficiency of public spending is essential for supporting fiscal consolidation and achieving long-term sustainable and inclusive growth. There is potential to improve the government's allocative efficiency to improve value-for-money in areas such as health care and capital investments. Improvements in procurement systems, including the use of e-Procurement, also present significant opportunities for efficiency savings. Efficiency in public services administration is also key, as the Government of Zimbabwe's jobs evaluation report suggests there are opportunities to streamline the civil service. The progressivity of expenditure policy can also be improved through more and better targeted spending on social protection. The operationalization of a national 'social registry' could help improve targeting of Zimbabwe's current social protection systems and help improve climate resilience. The PFR shows that fiscal policy can be a critical anchor for macroeconomic stability that can ensure a credible and efficient national budget and assist a stable and competitive currency. Jointly, this would lead to higher growth, major poverty reduction, and a major step toward achieving Zimbabwe's development objectives. Distributed by APO Group on behalf of The World Bank Group.
Zawya
19-02-2025
- Business
- Zawya
A New Public Finance Review Aims to Help Eswatini Improve Fiscal Policy for Better Development Outcomes
The World Bank and the Government of Eswatini launched a new review highlighting ways to make fiscal policy in Eswatini more efficient and effective. The Eswatini Public Finance Review (PFR): Leveraging Fiscal Adjustment for Better Development Outcomes, is the first review for Eswatini since 1996. The review aims to support the country in enhancing the efficiency and effectiveness of public spending and revenue mobilization to drive sustainable and inclusive economic growth. It provides a comprehensive analysis of Eswatini's fiscal policy and its role in addressing constraints to economic growth and livelihoods. The review acknowledges Eswatini's strong post-pandemic recovery, which averaged 5.3% growth from 2021 to 2023, while underscoring the urgent need for reforms to achieve broad-based economic progress. 'The Government has made significant progress since 2019 in reducing the fiscal deficit and implementing fiscal adjustment measures. Notwithstanding, stepped-up efforts are needed to implement some of the critical reforms highlighted in the Public Finance Review' says Eswatini's Minister of Finance, Honorable Neal Rijkenberg. The review highlights Eswatini's need for prudent fiscal management and identifies key pathways for achieving its development objectives. It emphasizes the need to make fiscal policy an instrument for macroeconomic stability and external competitiveness. Enhanced revenue mobilization through improved tax administration and streamlined procedures is crucial, along with strengthened public financial management for maximizing value-for-money. Improving public investment management while integrating climate considerations is essential to maximize the impact of public spending on economic growth and development, The review stresses the importance of directly tackling challenges in the health sector – a sector critical for human development and improving health outcomes. Eswatini can enhance economic efficiency and social equity in several areas. First, it can work to contain expansionary fiscal policy, eliminating expenditure arrears, and addressing the wage premium between the public and private sectors to promote macroeconomic stability and external competitiveness. Second, it can make improvements in tax administration such as creating a specialized unit for high-net-worth individuals, streamlining procedures, and maximizing electronic tax filing to boost revenue by 1.6 to 3.3% of GDP. Third, public financial management could be strengthened by enhancing budget preparation, improving budget execution and commitment controls, reforming state-owned enterprises, and streamlining public procurement, especially by implementing electronic procurement solutions. In the health sector, addressing inefficiencies could be achieved through better expenditure management, improved supply chains, and enhanced healthcare access and quality, particularly in primary care. 'Eswatini's future hinges on its ability to leverage fiscal policy strategically. By implementing the reforms outlined in the Public Finance Review, Eswatini could create a more competitive and resilient economy, fostering inclusive growth and improving the lives of all Emaswati. The World Bank is committed to providing technical assistance and financial support in guiding the country towards fiscal sustainability and inclusive growth," says Satu Kahkonen, World Bank Country Director for Eswatini. Distributed by APO Group on behalf of The World Bank Group.
