MDC-T says Zimbabwe’s 2016 budget is a damp squib

The Movement for Democratic Change led by Morgan Tsvangirai has described Finance Minister Patrick Chinamasa’s 2016 budget as a damp squib that will not turn around the country’s fortunes.

The party’s Secretary for Economic Affairs Webber Chinyadza said the incremental, gradual approach and snail’s pace of business policy reform adopted by ZANU-PF will not give the nation the immediate reprieve needed to change the misfortune of Zimbabweans wallowing in poverty.

“The glaring failure to deal with the infrastructure deficits is an indicator of a government that has no solutions for the suffering masses of Zimbabwe,” he said.

“It must be made clear that the infrastructure deficits are not a new problem but a situation that was carefully contrived by the ZANU-PF governments’ mismanagements and poor economic policies over the years. Accordingly we do not believe that it is sincere in its slap dash programs to address this problem now and in the future.”

Chinamasa announced a $4 billion budget on Thursday but 92 percent of the money will go towards salaries for civil servants.

Chinyadza said the budget did not address the revival of agriculture which is the backbone of the economy either.

“The budget statement revealed the declining performance of the agricultural sector which is the backbone of Zimbabwe's economy. The government’s failure to pay for the agricultural produce every year, its failure to plan for adequate inputs to support the sector, and its inability to create sufficient conditions for increased investment in the sector can only exemplify the lip service it is according to agriculture in the country,” he said.

“Over and above this, the infighting that is taking place in ZANU-PF and various government ministries cannot aid the country to move in one direction in shoring production and productivity. The current government is very unstable and is concentrating efforts in the power struggles whose impact can only lead to declining economics performance.

“As if this is not enough, its insatiable appetite to spend even above the budgeted allocations cannot go unnoticed. We are aware of the serious over expenditures on the presidential budget which expenditures have nothing to do with national output.”

He blasted President Robert Mugabe for spending too much on foreign trips asking who would rein in ministers if the boss was overspending. A recent report said government’s travel expenses had exceeded the budget by 240 percent.

“Surely if the highest office in the country is unable to curb its appetite for conspicuous consumption, where is expenditure control going to emanate from?” Chinyadza asked.

Full statement:

Friday, 27 November 2015

 Chinamasa's  budget a damp squib  

The MDC is gravely concerned that the 2016 national budget has not put in place a substantive programme to resuscitate the ailing economy.

The poor budget statement does not indicate the willingness of the Zanu PF regime to create the promised 2.2 million jobs, neither does it have a definitive plan to ease the liquidity crunch that is debilitating nor a programme of action to reverse the deflationary conditions prevailing in the economy and hence no positive programmes to grow the aggregate demand in the country.

As a result, the current conditions of weakening business environment will continue unabated and any hope to grow the economy dashed.

We are also dismayed by the lukewarm approach to increase both domestic and foreign investors by government. The budget statement fails to come up with a robust investment promotion initiative yet government is aware that the critical factors militating against investment are guaranteed property rights, improved access to finance at competitive costs, poor industrial infrastructure, corruption, and the high costs of doing business.

The fact that Zimbabwe has remained at the tail of global competitiveness in the world rankings for doing business should have spurred the Zanu PF government  to deal decisively, once and for all, with all the factors militating against improving the environment for doing business in the country.

The incremental, gradual approach and snail’s pace of business policy reform adopted by Zanu PF will not give the nation the immediate reprieve needed to change the misfortune of Zimbabweans wallowing in poverty.

The glaring failure to deal with the infrastructure deficits is an indicator of a government that has no solutions for the suffering masses of Zimbabwe. It must be made clear that the infrastructure deficits are not a new problem but a situation that was carefully contrived by the Zanu PF governments’ mismanagements and poor economic policies over the years. Accordingly we do not believe that it is sincere in its slap dash programs to address this problem now and in the future.

The budget statement revealed the declining performance of the agricultural sector which is the backbone of Zimbabwe's economy. The government’s failure to pay for the agricultural produce every year, its failure to plan for adequate inputs to support the sector, and its inability to create sufficient conditions for increased investment in the sector can only exemplify the lip service it is according to agriculture in the country.

The current hunger in the Southern and South Eastern parts of the country is a phenomenon that will continue into the future. The small allocation made to this sector will come late when the growing season is already expended and will therefore have a minimal impact on agricultural output.

The national budget should be taken as an important instrument used to direct, manage and reposition a country’s economy and welfare of its citizens.

It is a tool used by governments world over to raise revenues, allocate resources and redirect the economy to achieve set objectives which are enunciated in national plans.  In this context it should ideally be a short term tool to raise revenue, allocate public expenditure and put into place economic policies and programmes, which steer the national economy to achieve set objectives usually set in economic blue prints of a nation.

 In addition it is a tool that is used to address the emergent problems which many be militating against the achievement of national development objectives. It should indeed be the rallying point for all national efforts to mobilize the scarce human and material resources in a direction that engender national unity and national well-being as espoused in the development programmes of a nation.

Further, budget presentations should take stock of the status quo in the economic and national well-being and call arms all stakeholders to contribute their all in nation building and to resolving the persistent problems which may be bedeviling the welfare of the nation. The utility of this tool in Zimbabwe is no different.

Zimbabwe is currently one of the most backwards economies not only in the region but the UN subcontinent with a population that is wallowing in poverty and with an economy that is regressing especially at a time when other economies are registering rapid growth and development. Zimbabwe is an economy whose majority population is living well below the internationally acceptable levels of poverty of one US dollar a day, where the levels of unemployment are over 90% , where the bulk of the economically active population are emigrating to other robust economies to eke living, where almost all sectors of the economy are reducing production and productivity, where national infrastructure is seriously being downgraded and where hunger stalks the erstwhile breadbasket of Africa.

In particular, the Zimbabwe economy is punctuated by reducing aggregate consumer demand leading to persistent and deepening levels of deflation ever recorded in the history of the nation. As a result, the level of de-industrialisation and closure of businesses is unparalleled in history. Instead of building factories and business units which should employ the budge-oning population, it is an environment where the in formalisation of the economy is growing in leaps and bounds and where the youth nurse hopes of ever getting a job in the foreseeable future in a country of their birth.

It is in the context of the above that one would hope that any government worth its salt would stand up to address these problems. Instead the incumbent government spends its time at best paying lip service to these issues, at worse not even putting a plan, programme to address the issues.

Over and above this, the infighting that is taking place in Zanu PF and various government ministries cannot aid the country to move in one direction in shoring production and productivity. The current government is very unstable and is concentrating efforts in the power struggles whose impact can only lead to declining economics performance. As if this is not enough, its insatiable appetite to spend even above the budgeted allocations cannot go unnoticed. We are aware of the serious over expenditures on the presidential budget which expenditures have nothing to do with national output.

More importantly, such expenditures are disproportionately above the total sums allocated for capital development in the country. Surely if the highest office in the country is unable to curb its appetite for conspicuous consumption, where is expenditure control going to emanate from.

Webber Chinyadza – MDC Secretary for Economic Affairs

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