'COVID-19 has paralysed Zimbabwe'

SPEAKER of the National Assembly Jacob Mudenda yesterday said the effects of the COVID-19 pandemic had paralysed the economy and increased the country's domestic and international debt burden.

"The pandemic paralysed the economic sector, culminating in the distension of the informal sector, an increased domestic and international debt burden on the country. Similarly, the social sector was not spared by the vagaries of the pandemic," Mudenda told a 2022 pre-budget briefing seminar in Harare.

"There was an unprecedented increase in poverty, loss of jobs, an exponential increase in domestic and gender-based violence as well as rampant crime and drug abuse, particularly among the youths as a result of indolent employment inertia."

The seminar was held under the theme Reinforcing Sustainable Economic Recovery and Resilience.

He claimed that government had quickly implemented a number of interventions to resuscitate the economy, including the $18,2 billion stimulus package to scale up production, improve health facilities, and reduce poverty through harmonised cash transfers.

"Further to that, the advent of the pandemic exposed the inherent weaknesses in our health infrastructure systems and equal to the task, the government also implemented various programmes and projects such as the completion of Ekusileni Hospital, the refurbishment of all the central hospitals and the commissioning of the United Bulawayo Hospital Orthopaedic Centre, among many other development projects."

Mudenda urged MPs to promote credible governance, transparency and accountability.

He said Finance minister Mthuli Ncube should craft a 2022 national budget which would provide adequate safety nets for vulnerable groups.

On natural resources, Mudenda said new ways should be found to harness currently under-utilised human, natural and other resources, as well as minimise wasteful expenditures in the process through robust parliamentary oversight.

"Given the scale of disruption induced by COVID-19, it must be recognised that extraordinary government expenditure will be required to sustain aggregate demand and to support disposable incomes," he said.

"In this respect it is my fervent hope that you will, among others, recommend the upward review of the income tax bands but spread to lower levels over the spectrum of our economy, inclusive of the informal economy and consequently the notching up of the salaries of our hard working and committed employees to stimulate aggregate demand."

The strategy paper estimates revenues will amount to $533,2 billion against total expenditure of $579,2 billion, for a deficit of $45,9 billion.

"This expenditure plan, therefore, must sustain the recovery of the economy driven by the implementation of sound macroeconomic policies, anchored on fiscal and monetary discipline," Mudenda said.

He said projections for diaspora remittances were that the country targeted to get US$1,3 billion, a 73% increase from US$374 million recorded in 2020 and US$649,4 million in 2021 for the period January to June.

"In this regard, it is imperative for Parliament to demand of the Executive a polished and attractive diaspora policy and a law which can lure diasporans to invest more back home, including investing in diaspora bonds. In that way we may reduce over dependence on development aid."

The Speaker of the National Assembly said the country needed effective policies and institutions, rule of law and enhanced economic growth.

"Transparent and properly enforced laws, efficient fiscal management and resource allocation, appropriate regulatory systems, and prudential public financial systems are all essential to sustainable economic growth. In this regard, we need strong public finance management which guarantees equitable use of public funds," he said.