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Mnangagwa speaks on national budget

by Staff reporter
24 Nov 2018 at 07:49hrs | Views
ZIMBABWEANS yesterday expressed mixed reactions to the 2019 National Budget statement with a majority saying it represented a bold, painful but very necessary step to return the country to prosperity.

Finance and Economic Development Minister, Professor Mthuli Ncube, on Thursday presented his fiscal budget speech under the theme "Austerity for Prosperity," emphasising the need for the country to take much needed painful measures to stabilise the economy and create a conducive environment for increased investment and job creation.

The $8,2 billion budget draws inspiration from the new Government's Transitional Stabilisation Programme (TSP), a two-year medium term blue-print that targets medium-term macro and fiscal stabilisation and laying a solid foundation for attaining the overall goal of a strong, sustainable and shared growth. President Emmerson Mnangagwa commended the bold propositions contained in the 2019 National Budget Statement.

"I wish to congratulate @MthuliNcube on a historic, responsible and disciplined budget, which both cuts costs and contains crucial confidence building measures to stimulate economic growth," President Mnangagwa posted on his Twitter account.

"The core message - 'austerity for prosperity' - is a central component of our strategy to restructure, reform and rebuild, and I am confident that in years to come, this will be seen as a pivotal moment in Zimbabwe's economic recovery."

Trimming public expenditure through salary cuts for top Government officials including President Mnangagwa, his deputies, and Cabinet ministers, reducing diplomatic missions, and widening domestic revenue mobilisation, are some of the key highlights of the budget.

Decisively dealing with fiscal indiscipline through use of austerity measures, removal of pricing and policy distortions are the other focal points of the budget. Political analyst, Mr Methuseli Moyo, said the budget statement was the clearest sign by the Government to break from the past.

"It gives life to the new dispensation by making budgetary allocation to the operationalisation of devolution. Indeed this is a new in the governance of this country.

"Secondly, the budget is groundbreaking in its deficit containment measures, the highlight of which is the reduction of salaries of the top brass. That is unprecedented in the history of Zimbabwe, at least as far as I can remember. The Government is walking the talk, which is good.

"This and other austerity measures will free money for capital projects such as the Gwayi-Shangani water scheme for instance," said Mr Moyo.

He said he was also happy that a specific budgetary allocation has been made for Lupane Provincial Hospital for Matabeleland North adding that the province will finally have a provincial hospital like all the provinces.

Reverend Useni Sibanda of the Zimbabwe Christian Alliance (ZCA) commended the Government for funding the devolution policy.

"This is the first step by Government to officially recognise and possibly implement the devolution policy. By allocating a budget to it I think it's a good indication.

"However, one of the big disappointments is the small allocation to independent commissions. If the money is divided among the commissions it's nothing especially when we look at the MPRC which needs offices, decentralise its work and do outreaches," said Rev Useni.

Mr Butler Tambo, an economic analyst said the budget is not as realistic as one would have thought especially on non admittance of the fact that we have a three tier payment system, the USD, transfer and the bond. He was however happy with the Government's pro-devolution stance.

"This was not addressed by the Minister. We were expecting a solution going forward as far as the payment system is concerned. Setting aside money for the installation of provincial councils and the implementation of devolution of power is a positive development and good concept. The money might not be enough but it will kick-start the discussions around it," said Mr Tambo.

Zimbabwe Teachers' Association (Zimta) secretary general Mr Tapson Nganunu Sibanda expressed disappointment on the budget statement, saying it had nothing for the teachers.

"The budget will bring more misery than joy to an already impoverished worker in general and an already incapacitated teacher in particular. Teachers have been living under severe austerity since the 1990s, the days of the then Finance Minister Bernard Chidzero up until today.

"There is nothing to celebrate in this budget statement as teachers. The budget leads the country to a new trajectory of a neo-liberal economy. The budget is anti-worker, anti- people and anti-poor," said Mr Sibanda.

He said teachers needed a cost of living adjustment, considering that since September 2018, their salaries have in essence been devalued by not less than 300 percent. Explaining the budget Prof Ncube said the fiscal consolidation measures beginning 2019 were expected to give a strong rebound in growth to above seven percent from 2020.

According to Prof Ncube the primary objective of the 2019 budget policy statement is to stabilise the economy by targeting the fiscal and current account twin deficits. The two are seen as the key factors behind the problems facing the economy.

The budget also seeks to stimulate productive sectors by prioritising infrastructure rehabilitation and development, promotion of good practices in environmental management and supporting key pillars in sustaining the goal of inclusive and shared growth.

These include boosting food security and protection, human capital development and demographics, inclusive private sector led growth.

The fiscal measures are also aimed at improving efficiency in the running of institutions and governance, enhancing accountability; and embracing opportunities and preserving peace and security. With nominal GDP seen at $31,6 billion in 2019, he said, the economy can generate revenues amounting to $6,6 billion next year, including retentions ($400 million), taxes ($6,037 billion), and non-tax at $162 million.

Source - the herald