As we sat listening to the presentation of the 2020 national budget presented by the Minister of Finance Mthuli Ncube dubbed “Gearing for Higher Productivity, Growth and Job Creation” we were very sheepishly hopeful that the era of economic growth, development and job creation had finally dawned on Zimbabwe whose depressed economy certainly needs a messianic figure which Hon Mthuli had promised to be.
However as the presentation has now come and gone many questions remain to be answered.
At the end of the painful 2019 characterised by austerity measures one hoped for a more human faced or socialistic type of budget premised on the desire to restore national confidence by returning money into the pockets of many. Since Zimbabwe has become primarily an informal economy one also hoped that the Mthulian Budget was to focus on this sector as a vehicle to the prosperity he talked about.
With the current anti sanctions outcry from government one also hoped to hear Hon Mthuli layout a road map to work out around the sanctions. Any way let us look at the provisions of the budget.
Agriculture – let’s pray for rain
Let us begin by looking at Agriculture. The good professor agrees that Agriculture is the backbone of the economy yet his budget does not resonate this position.
We continue to pray and hope for good fortunes instead of doing pre-emptive planning. Even Joseph the Bible knew the simple fact that we have to plan for poor years ahead.
In these days of modern technology we hoped to hear the professor talking of funding a comprehensive agrarian revolution premised on mechanisation.
The use of the word “better planning” makes a mockery of the budget itself. What better planning is there when we still hope rains will bring growth in Agriculture.
Countries with no rainfall at all laugh at us when they hear us hoping for rain instead of investing in water harvesting, irrigation and mechanisation. The Best the Professor had to say for Agriculture is that we should go and pray for rain.
That is his idea of what he called “better planning” Agriculture remains a major driver of growth, and is projected to expand by 5% in 2020, on the back of better expected rainfall and forward planning.
Government is also embracing Climate Smart Agriculture (CSA) which harmonises agriculture development with environment protection and reduction in vulnerabilities to climate change.
In line with this thrust, emphasis will be on better planning, shared financing burden between government and private players, productivity which also relies on irrigation and marketing systems which guarantee farmer viability. The 2020 Budget makes a turning shift from ad-hoc planning to forward planning, particularly in terms of availability of inputs on the market.
Therefore, the Budget will, starting in January 2020, establish an appropriate financing plan which causes early build up and ring-fencing of both local currency resources and forex in support of domestic inputs producers and critical imported inputs.
Below is a photograph taken from the minister’s budget and one wonders whether this quality of crop and agricultural outlook can be obtained by wishful thinking and waiting for the rain.
Under the 2020 Budget, irrigation development is receiving top priority in order to guarantee food security in the country. Government will, therefore, target enough irrigable hectares for support to guarantee grain production of around 1.8 million tonnes.
For this purpose, capable farmers with irrigation facilities will be identified with a view of contracting and supporting them to produce required grains specifically for food security. The professor talks of those farmers with irrigation capacity.
The question is whether the professor does not recall that those were white farmers whom we rightly relieved of our land more than 2 decades ago.
The new farmer on the ground has no capacity. We hoped the professor was going to talk of capacitating these farmers so that they could engage in the irrigation he is dreaming about.
Over and above the challenges related to drought conditions, animal diseases are a major threat to productivity and competitiveness in the livestock sector. In 2018 and 2019, over 100 000 cattle deaths have been recorded in various parts of the country.
On animal production the finance minister talks only of cattle as if there are the only domesticated livestock in Zimbabwe. Instead of investing in improving productivity he only talks of vaccination and building dip tanks.
This again raises the question of our seriousness in causing meaningful economic growth.
Better planning according to Mthuli is when we encourage our people to take their farm produce to grocers’ shops to exchange for goods. They should go to the clothing shops with their goats and be given uniforms for their children. In this regard, the 2020 National Budget will avail resources to complete the Land Audit process to enable rectification of the anomalies under this issue.
Speculative “farmers” will ultimately be weeded out of farms, paving way for genuine farmers. The question is who made the new farmer a speculative farmer. Is it or was it by choice or government was complicit in what our new farmers turned out to be? Now we begin to question the objectives of the land audit.
Is it meant for the good of agriculture of for politicking? Who are the serious farmers the minister is talking about? Is the Mnangagwa regime planning to reverse the land reform? Without capacity how can the farmer be productive?
Government is concluding the evaluation exercise to facilitate the compensation of former commercial farmers.
To date, approximately 769 former farm owners consented to the interim payment scheme, with over 500 farmers having been paid. If government has money to compensate white farmers how does it fail to have funds to capacitate the people who got land from these white farmers.
Are white farmers more important than our people? Mining. Going through the section on mining it is safe and honest to say the minister has no plan for mineral and mining development. No mention of value addition. No mention of investment in high value minerals. No mention of speculative holding of mining claims. No mention of investment in natural gas. No mention of investing in mineral policing.
Industry
The manufacturing sector has immense scope for promoting our value addition thrust and hence facilitate higher value added output, value chains, diversification, export earnings and import substitution, which all underpin the growth and job creation thrust of 2020 Budget.
The Zimbabwe National Industrial Development Policy seeks to support innovation-led and investment-led industrialisation to increase capacity utilisation to above 70% by 2023, through targeting the following pillars and strategies:
• Import Substitution
• Export-led Industrialisation
• Strengthening Value Chains
• Mineral Beneficiation and Value Addition
• Industrial Parks and Innovation Hubs
I have to ask an honest question. Did the professor do this budget or one of the clerks in the ministry did it for him. Surely if this is the minister’s scope or understanding of industry then we are doomed.
I thought since agribusinesses was not mentioned above we will get them here. What of informal industries? What of the influx of cheap foreign goods? What of recapitalisation of defunct industries? What of government companies? What of the car manufacturing industries? What of the issues to do with FDIs? What of Transnational corporations?
The minister only throws words like value addition and import substitution without highlighting which areas exactly he is talking about. If he does not and claims he did what basis will we take him to account.
Additionally, the Budget will promote venture capital to support ailing industries and start-ups which are an important vehicle for the resuscitation of the local industry. Which or whose are these so called ailing industries.
Maybe the minister should provide us with his budget notes so that we are on the same page with him.
Development of Rural Growth Points
The devolution programme should embrace the rural growth points development model anchored by cascading Special Economic Zones to the respective growth points. Growth points will, therefore, be considered on the basis of comparative advantage of the area. Local authorities have, therefore, a greater role in promoting this development concept through developing the necessary infrastructure and investment mobilisation initiatives. Emphasis is on ensuring that targeted growth points have the necessary basic infrastructure of portable water and sanitation.
The Central Government on its part will provide relevant fiscal incentives. The million dollar question is why the minister included this in his budget if it is a function of local authorities. Is the minister now budgeting for local authorities?
Tourism
Tourism is recognised as one of the pillars anchoring Zimbabwe’s economic growth and job creation strategies alongside agriculture, mining and manufacturing. Mthuli Ncube says Tourism is ‘recognised’. I wonder who recognises it. It appears he does not. I also wonder whether the minister has a correct definition of tourism.
From where I am standing it seems in the minister’s book there is nothing called domestic tourism. We plan for international tourists whom we hope will come yet we fail to plan for our own local tourists.
We mention luxury coaches and fail to mention local buses and commuter Omnibuses who take part in both local and international tourism. The Minister also forgot to talk of face-lifting the tourist resort centres and developing new resort areas dotted around the country.
Construction
The construction industry will remain a key contributor to the country’s GDP, as well as employment creation, both in the medium and long term.
The huge infrastructure deficit in the form of modern roads, public infrastructure, residential houses, dams, schools and hospitals, among others, undeniably requires a thriving construction industry.
The country’s growing population, and hence rapid urbanisation, also require development of huge and sustainable infrastructure.
Notwithstanding a challenging macroeconomic environment, a growth of 0.5% is projected for the sector, which is conditional to Government meeting the following requirements: Improving the process of obtaining building permits;
• Promoting contract arrangements/regulations that encourage
• Foreign contractors to work with local partners to promote skills and technology transfer and sharing;
• Provision of affordable land;
• Mobilisation of affordable lines of credit to the construction industry for re-tooling purposes; and
• Sanitisation of management of state lands by regularizing confusion caused by land barons.
Again one wonders this section was included if construction is not a function of government. Why would we plan for private players and leave out the component of government? Who is going to build the roads, railway lines, health institutions and schools?
Housing and Amenities
The National Housing Delivery Programme seeks to address the country’s housing backlog, estimated to be around 1.3 million within the context of urban renewal/regeneration.
This involves the modernisation of old or dilapidated superstructures and the attendant infrastructural services such as sewer and water. Again this section shows a lack of seriousness on the part of the minister.
It again raises the question of whether it was him who prepared this budget. What exactly are we budgeting for here? There seems to be no government thrust towards housing.
The Minister is simply rumbling over the issue without stating exactly what housing project and where it is going to be done. If it is a function of local authorities and private players he should have simply left it out. How can the minister say government is going to give local authorities land when land belongs to local authorities?
We hoped to hear government provision of funds to local authorities to provide houses. He talks of civil service housing in passing without clearly mentioning the demand and where these houses are needed.
The mention of the Mt Hampden project is actually an insult. The project has appeared in every budget and one wonders whether its actually taking place.
The other issue is to do with the location of the project. Why would we locate such a big project on prime agricultural land?
JOB CREATION AND ENTREPRENEURSHIP
Jobs are the foundation of any economy and high levels of unemployment depict the economy’s structural weakness which invariably promote poverty, inequality and social problems.
In recognition of this, the 2020 Budget prioritises jobs creation which relies on formal employment opportunities and entrepreneurship. In particular the youth are targeted in as much they make an important contribution as productive workers, entrepreneurs, consumers, and agents of change.
Taking advantage of this demographic dividend can also speed up the pace for economic development Under the 2020 Budget, a fiscal incentive is being introduced to support employers who generate jobs for our young job seekers.
Any additional job created will attract a percentage tax credit to the employer. Again, despite accepting that employment is key and the youth are important the minister displays his lack of seriousness by quickly disowning the youth and relegating the responsibility for employing them to private players.
The minister says he wishes the youth well in their search of jobs but does not say he will employ them. The youth will be employed and we will clap hands for those who employ them.
In his budget there is no provision for public works programmes for the youth. There is no provision for loans for young entrepreneurs. No provision for youth capacity building. There is no provision for employment creation by government.
In short the budget is not people sensitive neither is it pro poor and will not endure sustainable human development.
Economic growth should move hand in glove with human development.
Linda Tsungirirai Masarira
LEAD President