2014 national budget preparations gather pace

Finance minister Patrick Chinamasa

Members of Parliament converge for the next two days at the resort town of Victoria Falls for a pre-budget conference amid expectations legislators would come up with firm proposals to breathe life into the country’s faltering economy.

Njabulo Ncube
Deputy Editor

More than 300 legislators from Zanu PF and the two formations of the MDC are expected at the conference.

Analysts yesterday urged the legislators to come up with an expansionist budget to revitalise the economy which observers say has been stagnant since the end of the coalition government in July.

Expectations are high the budget would take into cognisance Zanu PF’s election promises, particularly on job creation, revival of industries and a full rollout of economic empowerment policies targeting the poor.

There were calls for the budget to be seen encouraging more investment on social services, water health and education.

The legislators should also ensure that the budget factors in measures to address a fall in government revenue as well as formulate policies that would result in direct foreign investment, the analysts said.

There is a general consensus the new budget should be pro-poor and seek budgetary support from donors.

Analysts point out that in the rest of Africa, about 10% of most government operations are donor funded unlike in Zimbabwe where aid is estimated to average less than $300 000 per year.

Economist John Robertson pointed out that the government was struggling with reduced revenue in taxes as there were few firms operating profitably.

“Also the buying power of people is declining as workers are losing jobs. Job creation should be a priority of the 2014 budget,” he said, adding that the government should help the private sector create jobs by producing an investment friendly environment.

But he cautioned that no serious investor would pump money into the country as long as controversy remained over the government’s black economic empowerment laws.

The controversial legislation requires foreigners to surrender 51% of their stake to indigenous Zimbabweans.

“It appears the money to start business is always going up because we have an investment-unfriendly climate,” Robertson said.

There have been suggestions from other quarters that the government should impose prohibitive importation taxes to protect the local manufacturing industries, particularly the clothing and textile sectors that have collapsed due to cheap imports from the Far East.

But Robertson said a protectionist policy would be wrong as local manufacturers were battling operational challenges due to a harsh economic environment.

George Mukamba, an official with the Bulawayo Business Arise group, chipped in, saying the budget should prioritise revival of industries.

“The budget should address the recapitalisation of critical areas particularly in Bulawayo in the manufacturing and agricultural sectors,” he said.

“The 2014 budget should be an implementation strategy for the recently unveiled Zanu PF economic policy.”

Mukamba estimated that manufacturing would need $2 billion while agriculture requires $3 billion.

The Zimbabwe Congress of Trade Unions has said it expects a pro-poor budget, which recognises that the bulk of workers in the country earn below the poverty datum line estimated at over $531.