Categories: Stories

MDC-T Shadow Minister of Finance says a capital budget of $520 million cannot spur growth

Movement for Democratic Change-Tsvangirai Shadow Minister for Finance Tapiwa Mashakada says Zimbabwe is likely to remain stagnant next year as a capital budget of only $520 million cannot spur growth.

“The 2017 growth forecast was based more on thumbsucking not on any realistic macro-model. The projection becomes unrealistic and spurious if you consider the effect of climate variability on agriculture,” Mashakada says.

Mashakada was commenting on the $4. billion 2017 budget for Zimbabwe presented by Finance Minister Patrick Chinamasa last week. Chinamasa said he expected revenue of $3.7 billion.

“The economy remains stuck in a deflationary dungeon and the absence of economic stimulus measures such as increasing domestic consumption and gross fixed capital formation is inimical to growth. A capital budget of USD520 million cannot spur growth.

“A projected budget deficit of USD400 million is inconsistent with a growth mode. A figure of USD180 million for paying interest on debt is not compatible with a growing economy. Employnent costs gobbling 92% of the total budget blunt economic growth.”

Full statement

Tuesday, 13 December 2016

Zimbabwe 2017 national budget comments (part 1) by Dr. Tapiwa Mashakada

The  1.7% forecasted growth rate for 2017 from 0.6% in 2016 will largely depend on the resolution of the liquidity crisis, a surge in productivity, confidence, macro-economic and fiscal stability.

All these aspects are currently beyond Zanu PF's control. The 2017 growth forecast was based more on thumbsucking not on any realistic macro-model. The projection becomes unrealistic and spurious if you consider the effect of climate variability on Agriculture.

The economy remains stuck in a deflationary dungeon and the absence of economic stimulus measures such as increasing domestic consumption and gross fixed capital formation is inimical to growth. A capital budget of USD520 million cannot spur growth.

A projected budget deficit of USD400 million is inconsistent with a growth mode. A figure of USD180 million for paying interest on debt is not compatible with a growing economy. Employnent costs gobbling 92% of the total budget blunt economic growth.

In 2017 the economy is sure to register monthly negative growth rates on the back of fiscal imbalances and a persistent deflation.

Tapiwa Mashakada
Secretary for Finance and Economic Affairs
Movement For Democratic Change

(30 VIEWS)

This post was last modified on December 14, 2016 7:12 am

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

Reserve Bank of Zimbabwe expects more foreign currency sellers to join the interbank market

The gazetting into law of the payment of quarterly taxes on a 50-50 basis in…

December 4, 2024

Zimbabwe 2025 citizens’ budget

Zimbabwe has today unveiled a ZiG276.4 billion budget for 2025 during which it expects the…

November 28, 2024

To go or not to go- Mnangagwa in a quandary

Zimbabwe President Emmerson Mnangagwa has repeatedly stated that he is not going to contest a…

November 25, 2024

ZiG loses steam, falls against US dollar for five consecutive days

The Zimbabwe Gold fell against the United States dollar for five consecutive days from Monday…

November 22, 2024

Indian think tank says Starlink is a wolf in sheep’s clothing

An Indian think tank has described Starlink, a satellite internet service provider which recently entered…

November 18, 2024

ZiG firms against US dollar for 10 days running but people still do not have confidence in the currency

Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), firmed against the United States dollars for 10…

November 16, 2024