The budget presented by the Minister of Finance, Professor Mthuli Ncube, on Thursday is antipoor, as it places an excessive burden on citizens who are already suffering.
The budget falls short of regional, continental, and international benchmarks. While education received the highest vote allocation at Z$10.3 trillion, constituting 17.7% of the total vote allocations, it is still below the Dakar Declaration target of 20%. Similarly, health received Z$6.3 trillion (10.8%), which is a decline from the 11.2% allocated in 2023 and falls below the Abuja Declaration target of 15%. Agriculture received Z$4.3 trillion, which is 7.4% of the total votes and below the Maputo Declaration target of 10%. The Public Service, Labour, and Social Welfare, responsible for social protection, received ZW$2.4 trillion, which is 4.1% of the total votes and 1.5% of GDP. According to the Social Policy for Africa Agreement (2008), African governments should spend at least 4.5% of GDP on social protection.
The country is currently facing a cholera outbreak, and addressing this issue requires significant public investments in Water, Sanitation, and Hygiene (WASH). However, the allocated ZW$608.3 billion towards WASH represents just 0.4% of GDP, falling far below the 1.5% of GDP benchmark set under the eThekwini Declaration (2008). The Global Task Force on Cholera Control considers WASH investments as the foundation for achieving the goal of reducing cholera deaths by 90% by 2030.
Additionally, the budget introduces several taxes that clearly demonstrate the regime in
Harare’s anti-people stance and their lack of concern for the suffering of the masses. The
Strategic Reserve Levy, toll fees, vehicle registration fees, passport fees, and the introduction of a sugar tax and wealth tax will increase the cost of living and doing business in the country.
We firmly believe that shelter is a basic human right and should not be subject to taxation.
The budget’s decision to convert the COVID-19 and Cushioning allowance into pensionable
emoluments will further reduce the real incomes of civil servants. The regime should have
considered an upward review to compensate civil servants for the loss of income.
The taxation regime in the country is already onerous and burdensome, and the budget will
only exacerbate this issue. It will lead to a significant increase in the cost of accessing public services, transportation, fuel, and overall business operations. This will result in reduced disposable incomes and erode the country’s competitiveness. Additionally, high taxation is associated with high informality and low confidence.
The wealth tax on properties will make it harder, especially for first-time homebuyers, to
purchase residential properties. The budget presented by Minister Ncube is clearly anti-poor due to the excessive taxation measures it contains.
Furthermore, the budget lacks direct employment creation incentives and strategies, which is concerning given the significant employment challenges faced by the country, particularly in the informal and vulnerable employment sectors. The National Budget should support and facilitate the transition from informality to formality, as integrating informal enterprises into the formal economy is crucial for effective domestic resource mobilization and expanding the tax base. Additionally, formal businesses often have strong linkages with informal enterprises, which can be leveraged for economic growth.
To this end, we strongly reject the budget presented by Minister Mthuli Ncube. It is anti-poor, fails to meet regional and international benchmarks, and lacks adequate measures for
employment creation and support for the informal sector. We call on the regime to reconsider these budgetary decisions and prioritize the well-being and prosperity of the citizens of
Zimbabwe.
Only a broad government reforms can ensure that Zimbabwe has access to long term financing so that it does not milk its citizens.