Finance minister Patrick Chinamasa will today present the 2015 national budget amid pressure to breathe life into the comatose economy, analysts said yesterday.
NJABULO NCUBE/ MTHANDAZO NYONI
Chinamasa will unveil the budget in the National Assembly this afternoon against a background of a struggling economy.
The economy has been on the decline since President Robert Mugabe’s controversial re-election last year.
Close to 600 firms closed shop between August last year and September this year while at least 4 000 workers lost their jobs this year.
Analysts who spoke to Southern Eye Business yesterday said any budget bereft of expansionist policies to revive industries would be a damp squib.
Workers’ union leaders agitated for a pro-poor budget, pointing out that the bulk of the workforce in the private sector was barely making ends meet and companies were battling to pay workers their monthly wages and salaries.
The average capacity utilisation for industries plunged to 36,3% this year, implying a decline of 3% from last year’s average of 39%.
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The generality of those still in employment are surviving below the bread-line.
Critics of the Zanu PF administration say the economy has been stagnant since the end of the coalition government last year.
Labour lawyer, Rodger Matsikidze, said he was expecting a budget that would protect industries to stem massive retrenchments and job loses.
“The government should support local industry, especially the manufacturing sector,” he said.
“This will save industries from collapse as well as workers from being retrenched.
“These retrenchments are not good for our country because they are reducing the income base.
“We are expecting the government to formulate investor-friendly frameworks that will encourage foreign direct investment (FDI) for employment creation.
“In other words, we need a sustainable budget that will cater for everyone,” he added.
Industrialists and other company executives said they pinned their hopes on the 2015 budget and expected Chinamasa to prioritise the revival of industries.
Economic analyst John Robertson said the government should focus on formulating policies that will attract FDI.
“The budget comes at a time when the economy is struggling on shrinkage of investment and tax revenue,” he said.
“I, therefore, believe the budget should focus on bringing in foreign direct investment and on building capacity of industries.
“There should be clarity on policies such as indigenisation so that investors would be attracted.”
There is controversy over the government’s black economic empowerment law, which requires foreigners to surrender 51% of their stake to indigenous Zimbabweans and the punitive tax regime.
Robertson said the country was overburdened with a high unemployment rate which is currently estimated at over 90% by analysts.
Zimbabwe Congress of Trade Unions president George Nkiwane said workers were expecting a pro-poor budget that would also lure investors.
“We are looking at a budget that will cater for workers and industrialists, it needs to cater for everyone,” he said.
Nkiwane said the government needed to also work on the issue of taxation.
However, another economic commentator Collen Mugodzva said Zimbabweans should not expect much from the budget announcement. “I don’t see anything much coming from that budget,” he said.
“This is because we are not using our own currency hence we cannot determine the money supply into our economy.
“That on its own kills the effectiveness of the budget.
“It can be only significant if the government clarifies some policies like indigenisation to attract FDI.”
The government is struggling with reduced revenue in taxes as they are few firms that are operating profitably.
