Finance and Economic Planning Minister Patrick Chinamasa has challenged business leaders to take advantage of the pro-business fiscal policy initiatives announced in the 2018 National Budget, saying Government has done more than enough to create a conducive environment.
In his US$5 billion 2018 budget presented in Parliament on Thursday, Minister Chinamasa proposed several measures to cut recurrent expenditure, including civil service costs and diplomatic staff rationalisation, reduction in the size of the executive, staff benefits and foreign travels.
This is part of a new economic order involving implementation of a comprehensive expenditure management strategy that reorients resources towards development. It also focuses on measures to lower business and investment costs, re-engaging global partners, tackling corruption and growing exports.
Minister Chinamasa pledged to intensify reforms on the ease of doing business to grow the domestic economy, which is projected to grow by 4,5 percent next year, from 3,7 this year on the back of widespread reforms President Emmerson Mnangagwa’s administration will undertake.
The 2018 budget envisages strong growth across all main sectors of the economy, including agriculture, mining, tourism and financial services.
lndigenisation laws, which seek to create a 51-49 percent shareholding structure in favour of locals, will now only apply to platinum and diamond sectors. This is part of drastic measures to calm investors nerves and increase foreign investment inflows.
Speaking at the Confederation of Zimbabwe Industries post budget seminar on Friday, the Finance Minister said the budget, largely described as “business and investor friendly”, provided a favourable environment for businesses to attract investment, adding it was now up to the business to take advantage of the policies to grow.
He also assured business that there would be no deviations from the pronounced policies, while emphasizing the need for continuous engagement whenever necessary.
“We have made clear the direction the economy is going, supporting infrastructure, re-orienting the budget, supporting productive sectors and there is convergence on that.
“We are creating a conducive environment for you economic players and investors and the ball is in your court,” said Minister Chinamasa.
In separate interviews with The Sunday Mail Business, several business leaders described the budget as encouraging and positive.
Confederation of Zimbabwe Industries president Mr Sifelani Jabangwe said the budget is transformative, which allows investors to finance various projects in the country, given that the Government has provided assurances and security of investments.
“The budget has opened up a lot of policies which allow business to grow the economy. For example, the indigenisation policy is now more favourable to both foreign and local investors.
“As we know around April 2016, there was a lot confusion surrounding the policy. The new administration’s sweeping changes were made to lure investors,” said Mr Jabangwe. He said cutting cost measures and ease of doing business reforms were welcome developments and would go a long way in easing the burdens associated in investing in the country.
“The President Emmerson Mnangagwa-led Government has done its best. What is now left is for the industry to implement some of the policies crafted to grow the economy.”
Zimbabwe National Chamber of Commerce chief executive Mr Christopher Mugaga said the budget dealt with nagging issues, which all along looked like an elephant in the room.
“The issues he was speaking about, like trimming benefits for senior civil servants and doing away with non-critical staff like youth officers, are issues one would never dream of talking about without facing serious consequences,” said Mr Mugaga in an interview.
“But now that this is happening and worse-off in a season where elections are just around the corner, it means that the economy is now taking precedence over politics. Speaking at a Chamber of Mines Mining Industry Survey Report launch on Friday, former Chamber of Mines President Mr Alex Mhembere welcomed the budget, saying it is “consistent in terms of Government policy, which will generate confidence going forward.”
“We are confident that the policy statement delivered yesterday (Thursday) will inspire confidence. All we need now is consistency,” said Mr Mhembere, who is also Zimplats CEO.
Zimbabwe Economic Society president and former Institute of Chartered Secretaries and Administrators president Mr Lovemore Kadenge, said Minister Chinamasa was spot on, particularly on expenditure controls that will save the country millions of dollars. “Trimming the wage bill is welcome and will save the economy. However, I did not hear the minister speak about the civil service audit done long back because implementing it would go even further,” Mr Kadenge said.
He said parastatal reforms provided the impetus for growth given their strategic importance to the economy.
“I have always said parastatals need good governance and coming from ICSAZ, I am very interested in this. The Government should make sure the parastatals perform as indicated by Minister Chinamasa. This is welcome and Goernment should even go further to appoint the people who steer these enterprises based on merit and ability,” Mr Kadenge said.
“I want to commend the President (Mnangagwa) for choosing not to go on some trips because we cannot afford them. We wait and see if this will continue and he should ensure this goes for everyone, including trimming the size of delegations and stopping everyone from flying business class, like what Chinamasa proposed,” Mr Kadenge said.
“Ministers and heads of parastatals should also stop driving these fuel guzzlers and the decision to cut fuel allowances will also go a long way. What remains is full implementation.”