Ncube faces 2020 Budget headache

Source: Ncube faces 2020 Budget headache – NewsDay Zimbabwe October 4, 2019

BY VENERANDA LANGA

FINANCE minister Mthuli Ncube faces a daunting task of structuring the 2020 National Budget in the wake of spiralling inflation now reportedly the highest in the world.

Felix Mhona, the chairperson of the Parliamentary Portfolio Committee on Budget and Finance told NewsDay yesterday that his committee will next Monday meet Ncube and his staff to hear how their 2020 Budget position paper would be structured.

Mhona said the committee will be keen to hear how the Finance minister will rein in inflation which continues to soar, and given that the budget will be announced in local currency.
The International Monetary Fund (IMF) recently said Zimbabwe’s inflation was around 300%, which means that the economy is experiencing major contraction. The local statistical office, Zimstats was ordered not to release inflation figures by Ncube.

On Tuesday, Ncube moved for the establishment of a committee of supply, to begin considering and voting the ordinary expenditure for the year as the pre-budget preparations for 2020 begin.

“The Budget and Finance Portfolio Committee will be meeting Ncube and his team on Monday so that they give us their position paper on the 2020 Budget,” Mhona said.

“The Finance minister has promised that inflation will stabilise and we are waiting for those variables — and we want him to explain when it (inflation) is going to stabilise, and how he will administer the budget given that it will be a Zimbabwe dollar budget.”

Mhona said given the soaring inflation figures, and the ever-rising intermarket bank rates against the United States dollar, the committee was eager to know how the 2020 Zimbabwe dollar budget would look like.

“Given the interbank rates that keep going up, we are worried that Ncube’s 2020 Budget in Zimbabwe dollars might not be sufficient. It might only cover the first quarter of the year if he does not manage to deal with inflation and to manage the exchange rate issues,” he said.

Mhona expressed fear that if inflation continues to soar, Ncube might be forced to come back to Parliament with a supplementary budget earlier than anticipated.

During the recent public hearings on the 2020 Budget, Mhona said the topical issues in rural and urban areas were calls by people that Ncube must deal with massive profiteering by EcoCash agents and ensure that they get cash through proper banking channels.

“That issue kept recurring, but we are glad that the Finance ministry and the Reserve Bank of Zimbabwe are already dealing with it,” Mhona said.

In rural areas, Mhona said people were crying foul over the distorted pricing systems in the country, and they demanded that they should also be cushioned from escalating prices.

He also noted that urbanites wanted provision of adequate electricity and fuel, and promotion of industrialisation and infrastructural growth in terms of good road networks.

 

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