Budget should address economic fundamentals, Mthuli Ncube urged

REPRESENTATIVES from various sectors of business have challenged Finance minister Mthuli Ncube to address critical issues such as the budget deficit and currency reforms when he presents the 2019 National Budget later this month.

By Kudzai Kuwaza

Mthuli will present his maiden budget on November 22 at a time the economic crisis in the country continues to deepen, characterised by a debilitating liquidity crisis, a severe cash shortage, rising inflation and skyrocketing of prices and shortage of basic commodities.

Speaking at an Alpha Media Holdings (AMH) pre-budget consultative meeting, economist Eddie Cross said Ncube needed to bring about measures to address the budget deficit.

“It (budget deficit) is on the verge of doing serious damage to our economy,” he said.

According to Treasury figures, the revenue and expenditure performance for the first nine months of the year was $2,5 billion, against a target of $715,4 million, with the deficit financed through Treasury Bills and overdraft at the central bank.

Cross pointed out that inflation was much higher than the 5,39% announced by the national statistical body, ZimStats and will remain strong in the first quarter of next year.

He said there was need for Ncube to deal with the unofficial exchange control rate, which was at the core of the country’s multi-faceted problems.

Cross was confident that the Finance ministry would address the myriad of challenges affecting the economy, predicting that there would be a major upturn of the economy by March next year.

Delta company secretary Alex Makamure said banks should be responsible for the allocation of foreign currency and not the central bank as is the case currently.

Makamure said although United States sanctions were undesirable, government should implement what was required in Zimbabwe Democracy and Economic Recovery Act to have them removed.

He said conditions to have sanction removed, which include respecting property rights, were “not onerous”, adding that engaging the international financial institutions without implementing required reforms was like “being on a treadmill going nowhere”.

Pharmaceutical Society of Zimbabwe president Portifa Mwendera said there was need for the government to match rhetoric with action.

“There have been plans on the ground for a National Health Fund, but it remains an idea,” Mwendera said.

“It has been talked about by successive ministers and permanent secretaries, but nothing happens.”

He added that there was need to restore social safety nets to protect vulnerable groups, adding that it was “painful” to see pensioners struggle despite having paid taxes to government over a period of 40 to 50 years.

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