Mnangagwa sinking $13 million monthly into Zupco hole

Finance minister Mthuli Ncube yesterday revealed that government was coughing about $13 million every month to subsidise the country's public transport system through Zupco buses.

"Again, we have the Zupco programme in terms of mass urban transport system, a subsidy that is costing us $13 million per month," Ncube said.

He was speaking at a post-mid-term budget review meeting hosted by Alpha Media Holdings in conjunction with Zimbabwe Economics Society in Harare yesterday.

"We are committed to subsidise the transport so that the vulnerable can get transport. Of course, we are now figuring out how to accelerate the expansion into rural expansion. When government does this kind of reform, it's good that you provide social protection."

Government reintroduced the Zupco buses that charges nominal fares for urban transport to cushion the commuting public from skyrocketing commuter fares mainly triggered by fuel price hikes.

But the Zimbabwe Congress of Trade Unions (ZCTU) said government subsidies were crippling the economy and pushing the country deep in debt which will be paid by taxpayers and poor civil servants.

ZCTU president Peter Mutasa said workers had no reason to celebrate the transport subsidies by government because it will come back to haunt them.

"Workers do not need subsidies for transport, they need to get salaries that will cater for their needs, this idea of cushioning workers on transport so that they report for work while you are not giving them salaries that meet their needs is deceptive and it's a neo-liberal approach," Mutasa said.

Government has been bleeding close to $300 million every month subsidising fuel procurement, more is being lost on Zupco buses which continue to charge 50 cents per trip despite fuel now selling at $9 a litre and spare parts and service costs shooting through the roof.

Private players are now charging close to $5 equivalent to US0,50 a trip within the urban areas which many cannot afford owing to poor salaries.

Economist Godfrey Kanyenze, who is part of the ZCTU, said there was need for a holistic approach in solving the economic crisis facing Zimbabwe through the Tripartite Negotiating Forum (TNF) instead of piecemeal approaches.

"What we need to do is to think in terms of economy wise, instead of sector wise, now we are talking about energy, if we liberalise energy, if we liberalise water, if we liberalise fuel procurement and God knows what else, are we also looking at the cumulative effect of this because these are things that are happening in a highly volatile environment, where inflation has jumped from 98% in May to 176% in June and part of the challenge of government is to rein in inflation, which is actually the opposite of what we are talking about. We are looking at it through the TNF, through a much broader approach," he said, adding there was need to balance pricing and salaries to ensure that one does not suffer at the expense of the other.