Finance Minister seeks to revive industries
FINANCE Minister Patrick Chinamasa has given the earliest hints his 2017 national budget shall focus on reviving industry but his critics say this was a fallacy under a mistrusted Zanu PF led government which also lacks fiscal discipline.
Chinamasa said in a statement on Tuesday he will present his budget on 8 December this year.
“The Minister of Finance and Economic Development wishes to announce that he will present the 2017 national Budget Statement to Parliament on Thursday 8th of December, 2016,” Chinamasa said.
“The theme of the 2017 Budget is ‘pushing the frontiers of production’, in keeping with the Government’s policy thrust to increase production and productivity in on-going efforts to revive the economy.”
Critics say Chinamasa walks a tight rope as he has to balance between Zanu PF’s political interests and a budget with pragmatic solutions to the country’s economic crisis.
Zimbabwe, once the breadbasket of Southern Africa, is now a net importer of food, something which has depleted the little foreign currency reserves the country could channel towards industrial revival.
Agriculture, the mainstay of the economy during the pre-2000 peak period, is now a pale shadow of its yesteryear days when the country could produce surplus to export.
Industry has been hamstrung by power outages, a high tax regime, poor capitalisation coupled with expensive loans and stiff competition from cheap imports especially from South Africa.
Other anchors of the economy such as mining and tourism have had modest returns amid political interference that has seen some diamond mining firms ordered to disband and form one single mining conglomerate under government control.
Because of the hostile environment, potential investors from outside have chosen not to risk for fear of losing their investments.
After a painstaking effort to secure outside loans and lure back foreign investors, Chinamasa has seen his hopes dashed after the Zanu PF government started brutalising civilians while land invasions continue, even though no longer in scales witnessed in 2000.
He has however tried to come up with solutions he could control and these involved suspending civil servants’ bonuses but this was twice short down by his populist boss, President Robert Mugabe.
Chinamasa has had clashes with indigenisation minister Patrick Zhuwao who has in the past scolded his Zanu PF colleague for alleged fixation with outside solutions while turning a blind eye to the country’s vast natural wealth which he said had potential to lift the economy back to its fit again.
Currently, the government wage bill is at 96 percent of the country’s total revenue.
“For far too long as an economy we have focused on consumption,” said PDP secretary for finance and economic affairs, Vince Musewe in an interview with Newzimbabwe.
“You just have to look at our government expenditure. It has not been focused on generating future income but spending future incomes that is why we have such high debt levels.
“A shift to production begins to create future income through developing our productive capacity as a country which creates jobs and incomes. We must invest in the future.”
Government is struggling to pay its bloated workforce on time and also try to maintain government officials’ expensive lifestyles.
Revenue targets have been missed for the better part of the financial year while corruption by President Mugabe’s cronies remains unchecked.
“We must cut unnecessary expenditures and direct them towards capital formation,” Musewe said.
“We must attract investment and create policy consistency to allow good planning. This has been the main reason for our failure. It needs a paradigm shift and new thinking and new behaviours and I doubt that Zanu PF can achieve that.”