OPPOSITION lawmakers have criticised the mid-year budget review accusing Finance, Economic Development and Investment Promotion minister Mthuli Ncube of failing to address critical fiscal policy issues.
They also accused Ncube of neglecting to articulate a plan to tackle the country’s ballooning debt.
Economic analysts and the general public noted that Ncube’s mid-term budget was meant to promote the use of the Zimbabwe Gold (ZiG) currency by businesses.
Ncube presented his mid-term budget statement in Parliament yesterday.
However, opposition legislators were denied the opportunity to debate the budget following a sudden adjournment of the House to August 20 this year.
Leader of government business in the National Assembly, who is also the Justice, Legal and Parliamentary Affairs minister Ziyambi Ziyambi, moved the motion to postpone the debate to the chagrin of opposition legislators.
“It has always been tradition that after presentation, we adjourn. So I move that the House do now adjourn,” he said as opposition legislators protested.
Added Ziyambi: “Maybe some of the Honourable Members are new, but I know that some have been here for a long time. It has been the practice that after the statement, Honourable Members are allowed time to study and then debate.
“We have never had a practice of debating without even the statement. They have not even had sight of the statement.”
Meanwhile, Dzivarasekwa legislator and opposition Citizens Coalition for Change (CCC) chief whip Edwin Mushoriwa has accused Ncube of reversing key fiscal measures contained in the Finance Bill passed in December last year.
“The minister has missed an opportunity to sort out the fiscal policy in the country. You may be aware that when we passed the budget in December last year, the minister within 10 days then reversed the fiscal measures that where contained in the Finance Bill. The minister failed to address the ballooning debt,” Mushoriwa charged.
“If you see the figures that the minister put, you may be aware that the minister allowed US$3,5 billion to go to Mutapa Investment and Afrixembank.
“All this was not contained in the 2024 budget. So, in reality, the mid-term review does not talk to the current scenario.”
Mushoriwa said Ncube also failed to clearly state to Parliament the disbursement matrix of the budget.
“It is one thing to budget and another to disburse. The minister has not been disbursing money to ministries,” he said.
Marondera Central legislator Caston Matewu (CCC) criticised government control of the exchange rate, arguing that it had stifled trade adding to perpetuated poverty among the citizens.
“It is sad that the budget came to Parliament and we are not allowed to debate the budget. We are going backwards. At the beginning of the year, we had projected a growth of almost up to 5%, but there has been that reduction because we are not putting the ZiG to test.
“The ZiG is there and is being controlled at a certain percentage, but it means that it cannot trade because there is no test to it. This means that we are just containing ourselves, but the net effect of that control is that people will be wallowing in poverty,” Matewu said.
“This mid-term budget presentation is actually bad. It is showing that while other companies and other players are milking it, the citizens and workers are the ones suffering, but we were shot down and told that there is no debate. When will we be preparing for the new budget? What has happened here is de-service to the people of Zimbabwe.”
In a snap survey, analysts and ordinary citizens said the budget offered a glimpse into government’s fiscal strategies and economic goals for 2024.
Said former Unifreight financial executive Lisbon Mhonda: “The adoption of the ZiG marks a pivotal moment for Zimbabwe’s economy. It’s a bold step aimed at curbing inflation and stabilising our currency. However, the success of this move hinges on consistent policy implementation and public confidence.”
Mildred Ndurira, a graduate from the Business Economics School at Wits University in South Africa, said the increased use of the local currency would stabilise the economy in the long run.
“This budget sets a framework for economic transformation. The focus on local currency usage is crucial for long-term stability, but the government must ensure that these policies are effectively communicated and implemented,” she said.
Zimbabwe’s public debt reached ZiG287,2 billion by mid-2024, with external debt comprising 58,7% of this total.
The nation secured US$120,5 million in development assistance from international partners in the first quarter, providing critical support for national development initiatives.
Local farmer Edmore Kudyarawanza welcomed the scrapping of value-added tax (VAT) on livestock products.
“Scrapping VAT on livestock products is a huge relief for us. It means lower costs and more competitive prices for our products. This move will help us to reinvest in our farms and support our families,” he said.
But economist Persistence Gwanyanya hailed government for walking the talk in promoting the use of the ZiG.
“The minister met our expectations following the successful launch of the ZiG and stability therefrom. It’s quite comforting that the fiscal authorities came in with measures to support the ZiG and stability thereof,” he said.
“The monetary authorities have always been pushing to drive the demand for the ZiG and the expectation of the general public has been for government to lead in this imperative.”
For the first half of 2024, revenue collections reached ZiG36,5 billion, while expenditure stood at ZiG38,9 billion, constituting 44,2% of the approved budget.
The government projects a total revenue of ZiG93,2 billion by year-end, representing 22% of gross domestic product (GDP), against expenditure of ZiG96,8 billion, resulting in a budget deficit of ZiG5,6 billion (1,3% of GDP).
The budget allocated substantial funds to key sectors to drive economic growth and human capital development, with ZiG6,7 billion allocated for education and ZiG2,5 billion for health in the first half.
Additionally, ZiG3,8 billion was set aside for the rehabilitation and construction of health infrastructure and the procurement of medical equipment.
Ncube said the country’s total debt stock stood at ZiG287,2 billion as of June 30, 2024, with external debt accounting for 58,7% (ZiG168,5 billion) and domestic debt making up 41%.
He also proposed amending legislation to make this intervention permanent and to compel companies earning over 50% of their revenue in foreign currency to account for corporate income tax on a 50:50 basis.
Newsday
