Mthuli urged to ‘adequately’ fund industry

Source: Mthuli urged to ‘adequately’ fund industry – NewsDay Zimbabwe

BY STAFF REPORTER
FINANCE minister Mthuli Ncube has been urged to ensure that industry is well funded in his 2022 national budget in order to ensure productivity as most industries are currently using archaic equipment and outdated
technologies.

This was said in a statement on the country’s economic outlook by the Zimbabwe Coalition on Debt and Development (Zimcodd) produced this week.

Ncube is expected to announce the 2022 budget statement in Parliament on November 25.

Zimcodd said the country also needed political action supported by an explicit legal framework giving citizens and companies full property rights in order to reverse the poor investment climate.

“Key sectors like mining require US$3 billion for retooling and capitalisation. How will the MoFED [Ministry of Finance and Economic Development] facilitate such funding, given the dried credit lines? The 2022 national budget has got huge expectations from the business sector and government is expected to create a level playing ground for the business sector if productivity is to be supportive of the growth trajectory expected in 2022,” the Zimcodd statement read.

“The country risk requires government to observe several political-governance reforms that must be prioritised if the engagement and re-engagement drive is to bear fruits. This takes more political action supported by an explicit legal framework giving all citizens full rights including private property rights.

“This, in turn, should reverse the poor investment climate. Whereas some measures to improve the investment climate require policy reforms, especially in the case of the inefficient auction market, addressing the power outages that are affecting production requires a long-term strategy bent on expanding installed renewable power capacity.”

Zimcodd also urged government to invest in environment-friendly hydropower plants equipped with cost-efficient technology capable to generate power even at low water levels.

“The weak aggregate demand requires government to observe the poverty datum line in setting minimum wages and to timeously adjust the same as inflation erodes the purchasing power of the local currency. This not only reduces the number of people falling into extreme poverty but recharges aggregate demand, a push for higher local industry productivity,” the debt watchdogs said.

Ncube is expected to announce a $900 billion budget and is also under pressure to adequately fund other sectors such as health, education and social services.