BY DR MASIMBA MAVAZA | In the darkness of the Zimbabwean economy with ordinary people grinding beans using their back Finance Minister Mthuli Ncube casts a very bright light at the end of the tunnel. He said the country is expected to record an economic recovery of up to 3% in 2020 against a projected negative growth of -6.5% this year.
The light dazed through the tunnel to the windy end. Pundits have asked how the country recover at a minus Seven growth. Is Mthuli Ncube playing monkey business or is he a silent monkey seeing mirage at the end of the tunnel. Ironically his name is Loosely translated as a Silent Monkey. Ncube being the monkey totem.
Presenting his proposed $63.6 billion national budget in parliament minister Ncube pinned the economic recovery on the good rains expected in the draught promising season. We are thrown into a hope of faith where we hope in the unseen. The expectations of recovery is making the nation run after nothing like a madman chasing nothing. The projected economic recovery is based on the hope that Zimbabwe would record a better rainfall season supported by increased support towards a version of command irrigation infrastructure to sustain agricultural projects and other issues. We can only hope that Tagwirei will not be placed in charge of the recovery project. It will be a case of asking a hyena to sherpard the sheep.
Being that as it may the minister said the country is expected to record improved macroeconomic stability through continued fiscal and monetary discipline, as well as a substantial improvement in the balance of payments.
Minister Ncube put aside some economic upward factors, which includes importing electricity supply and financing other alternative sources of energy.
This introduces the highly financed solar energy to alleviate and easy pressure on electricity consumption. The minister introduced These include puting together emergency power generation capacity from independent power projects; extension of supportive tax and non-tax incentives to stimulate domestic production; advancing implementation of the ongoing ease of doing business reforms to improve the investment environment; and increased investments by both government and the private sector. Unfortunately there has been nothing put in place to curb corruption which has itself destroyed the recovery process.
Of great excitement was the hope that the monthly inflation will fall to single digit from the first quarter of 2020 to close the year around 2%. If these wishes can only become horses we will all ride.
There was further ululation when the minister noted that the national budget marks the end of austerity measures and the ushering in of growth stimulation and employment creation through promotion of production oriented investment and productivity, with more focus on fiscal responsibility.
Minister Ncube reiterated on the ongoing ease of doing business reforms to improve the investment environment; and increased investments by both government and the private sector.
Zimbabwe had pulled on without production at all. The minister has vowed to allow and finance production related investments to create job creation. The growth and productivity thrust will be supported by the reengagement process with the international community which will enable us to meet our budget objectives.”
Ncube said revenue collections for 2020 are estimated at ZWL$58.6 billion. “In order to avoid the undesirable impact of deficits on money supply and macroeconomic stability, the 2020 Macro Fiscal Framework espouses a low budget deficit of around 1.5% of GDP (Gross Domestic Product) implying expenditures of ZWL$63.6 billion, excluding retentions.”
He said the main fiscal policy objective in 2020 is directed at managing expenditure within the allocated framework supported by noninflationary financing and complemented by a tight monetary policy.
“… Strict adherence to the procedures laid out in the Public Finance Management Act [Chapter 22:19], including the issuance of warrants by the Accountant General prior to any spending commitment made by an accounting officer will also be strictly enforced. Rule of law will be the order of the day under my watch.”
The minister pointed out that there will be no development without fuel and electricity. So government will look at robust ways of dealing with load shedding and fuel shortages.
“Government has already instituted new pricing frameworks for fuel and electricity that adequately reflect costs, including those resulting from changes in import prices and exchange rate fluctuations. The pricing framework for fuel also ensures that pump prices remain comparable to those charged in neighbouring countries, so as to remove arbitrage opportunities arising from illicit fuel exports.”
He said ZWL$8.4 billion will be used for power generation.
“…The 2020 Budget seeks to alleviate power supply constraints through the rehabilitation and expansion of Hwange Thermal Power Station, supporting alternative sources of energy such as solar power projects through various fiscal incentives relating to importation of equipment and respective accessories. IPP solar projects are already lined up for implementation. While ZESA (Zimbabwe Electricity Supply Authority) will raise the local resource component through cost recovery tariff model, Government through the RBZ (Reserve Bank of Zimbabwe) will assist to mobilise the requisite foreign currency from the market.”
If the budget is to live up to its soup corruption needs to be dealt with without fear or favour.
“Corruption causes economic malaise, wastage of public resources, jeopardises the environment for domestic and foreign investment and general morale in the public service, reinforces political instability and propagates social and economic disparities even in the presence of economic and social policies. Based on the Auditor General’s Report, Government is losing resources through corrupt activities. In addition, corruption in some parastatals and Local Authorities has compromised some desired development outcomes.
“There is a risk that some Development Partners may withhold funding for critical programmes and/or projects. Delays in taking remedial action against violations identified in audit reports has the unintended effects of propagating corrupt tendencies in the public service.”
He said to avert this risk, government from 2020 will focus on strengthening the internal control systems through among others, “finalisation of the establishment of the Centralised Internal Audit Unit; Developing and implementing a national anti-corruption strategy aligned with good practice principles with periodic monitoring and evaluation results; Enacting whistle blower legislation and protection in line with international best practices and capacitating institutions established to combat corruption,”
The finance Minister said the government would also tackle corruption through addressing conflict of interest issues where government is both regulator and player. “Furthermore, observations by the Auditor General will be pursued with a view of taking corrective measures.”
The main thrust of the budget targeted development which was a fresh air pumped into otherwise tired budgets.
This years budget becomes the first refreshing budget in decades.
The otherwise good budget came in the face of a ballooned cabinet a feat which was contrary to the pains the country has been labouring under.
With the open door policy the economy of Zimbabwe might defy all odds and shoot up.
All Zimbabweans do ponder the budget with great expectations.