via Zim to miss growth target: Biti – DailyNews Live. 9 June 2014
HARARE – Zimbabwe’s former Finance minister Tendai Biti says government must revise downwards its 6,2 percent 2014 economic growth target to 1,2 percent on the back of depressed revenue inflows.
He said government’s revenue collections were inconsistent with its projected target, adding that the economy was in a poor state.
“There is a serious downward revision. The government of the day must immediately address Parliament in the mid-term statement where they must tell the nation the truth on the state of the economy,” he said while addressing a press conference on the state of the economy on Thursday.
”The projected growth rate of this country should be at least 1,2 percent in 2014,” Biti said.
His remarks come as the World Bank in April downgraded Zimbabwe’s economic growth target to 3,4 percent , citing low investment levels and weaker than expected growth of the mining sector.
Biti said Treasury is likely to fail to collect $2 billion by year end, hence the weaker economic growth projection.
“When we get to 31 December there will be a (negative) variance of 50 percent. We are likely to see this government failing to collect… a targeted figure of $4,2 billion,” he said.
He added: “The government has not been collecting enough amounts to finance recurrent expenditure on wages. Wages are now 120 percent of government expenditure.”
He said to date, government has collected non-income tax of $9,8 million against the budgeted $19,223 million, leaving a variance of 48,5 percent.
This comes as tax collector, Zimbabwe Revenue Authority (Zimra), has warned of a tough economic environment ahead as government faces shrinking revenue inflows.
Gershom Pasi, the authority’s commissioner-general, told Parliament that despite surpassing the 2014 first quarter revenue target by two percent, Zimra is likely to miss 2014 tax income targets.
“We are headed for serious shrinkage of revenue unless something is done soon to increase revenue in the country,” the taxman said.
“It’s a miracle that we have surpassed our first quarter target… considering the current state of the economy. Things are not well out there,” he said, adding that government must urgently act to stimulate local production.
Last year, Zimra collected a total revenue of $3,4 billion, six percent short of a $3,6 billion target.
Government registered a budget deficit of $16,8 million in February compared to a surplus of $17,8 million in January, as revenue collections declined, further reflecting the economic slow-down.
February revenues stood at $248 million against a target of $273,3 million, resulting in a negative variance of $25,3 million. The month’s expenditures amounted to $264,8 million, 58 percent of which went to government employment costs.
Value added tax contributed to the bulk of tax revenue at 33 percent, pay-as-you-earn 24 percent, excise duty 14 percent while non-tax revenue remained subdued at four percent.
This comes as Zimbabwe’s economy, expected to grow by 6,1 percent this year, is showing signs of stress characterised by deflation, lack of aggregate demand and a trade deficit that has widened to $3,5 billion.
The country — still recovering from a decade-long economic recession — currently relies on tax collections to fund its national budget, with the public service wage bill absorbing 73 percent of all government spending, leaving just 11 percent for capital investment and 16 percent for non-wage recurrent expenditure. — Business Live
COMMENTS
Forever I will always wish I could have a politician I can trust. I know better. There will never be one. Mr. Biti just like every opposition politicians has decided to make political mileage by stating the obvious. He may have the economic, financial and legal verbiage of what is going on with our economy, but that does not help anyone or alleviate the problems we are facing. What he has taken labor to explain is nothing new. People are feeling it and have been feeling it for a long time and putting it in such erudite terms does not do anything to us. Mr. Biti just like his former comrade i n arms, Morgan Tsvangirai are lying in wait for the implosion of ZANU PF, instead of proactively taking concrete action to lay a foundation for real democratic Zimbabwe. They should be going around Zimbabwe right now advising and encouraging people to stand on their own and refuse to be used, so that the culture of democracy free of abuse from each other and from politicians take root. But who am I kidding? They are politicians. They are opportunist. They have no genuine interest in our well being and if given a chance, they will just replace this very corrupt and incompetent regime with another corrupt and incompetent regime. The point is, there is nothing new that Mr. Biti is saying. We live it and feel it everyday. What we need are practical solutions, not just politicking.
Its not the duty of politicians alone. They hv alwayz told us what to do, but remember the bob man slaughtered 40 000 in Byo for Zapu “boots on the ground approach”. I wld rather hv a calm leader doing things off stage than dead. When Nkomo dressed in his beautiful dress and hairpiece “eloping” into Zambia the vocal Zapu wch won the first presidence of Zimbabwe in 1980 simply collapsed. Just that some of yu were not born, tap into experience dzaaana Jenandebvu. Remember kuchena ndebvu hakusi kuremera, its wisdom wch come by age
Such wise words, Pati.
So pati, why rely on the politicians, get out and do something yourself….get civic society to stand up and be counted and demand the politicians do what YOU, the people want…. By the way will the increase in toll fees be going to repair roads or just to pay civil servants??
Biti, sour grapes. You had your chance and blew it. Now you have nothing to add but cheap political views. Zimbabwe needs direct action from people with the courage of their convictions, not analysis, view points, cheap talk and rhetorical assessments.
Munzwa, but I am doing exactly that. I hope by now, after 34 years of relying on politicians you are also of the mindset that they really do not have much to offer if pressure is not brought to bear on them. We are the civil society you are talking about and that includes you. We are responsible for our future. Gone are the days when were spectators at our own political future. No one is going to save you and me but you and me. So I urge you to participate in this search for freedom and not to stand on the sidelines and expect someone to free us.