via Budget elicits mixed reactions | The Herald 28 November 2014 by Zvamaida Murwira
THERE were mixed reactions to the 2015 National Budget statement that was presented yesterday by Finance and Economic Development Minister Patrick Chinamasa with some people saying it will stimulate economic growth while others expressed reservations.
Reserve Bank of Zimbabwe Governor Dr John Mangudya described the $4,1 billion National Budget as developmental.
“Very good Budget, developmental, inclusive and we expect that the business community will take advantage of all the incentives that have been provided in the Budget by the Minister. Export incentives, corporate tax which has gone down for those exporting, given that there are resource constraints it will go a long way. So it’s a good Budget under the circumstances,” said Dr Mangundya.
Foreign Affairs Deputy Minister Chris Mutsvangwa said the fiscal measures were proactive as Minister Chinamasa was moving to improve conditions of doing business in Zimbabwe which had been a major source of complaints from investors.
“I am excited by the proactive measures which the Minister is putting in place to address the readiness to do business index in Zimbabwe. There are rafts of issues that have been raised about how Zimbabwe responds to an international businessman if he wants to set up shop in Zimbabwe.
“To date the picture has been negative but the Minister has now rapidly addressed this,” Deputy Minister Mutsvangwa said.
He said chief among them was the establishment of special economic zones, which he said would help a lot if removal of trade sanctions by the European Union meant engagement at political level.
“This is a strong signal to any international businessman and to all capital centres that Zimbabwe wants to offer attractive conditions for the movement of capital into Zimbabwe,” he said.
Deputy Minister Mutsvangwa said it was high time Zimbabwe produces on bigger scale products inscribed “Made in Zimbabwe” being exported to the international markets as what China was doing.
Bikita West MP Dr Munyaradzi Kereke described the policy measures as progressive made under difficult circumstances at a time when the revenue base remained static and when the needs of the country and expenditure requirements continued to grow.
“In such a scenario it means belts have to be tightened further.
“Exporters have been given a boost in the sense that for the first time in the fiscal history of the country we have seen such bold steps to reduce corporate tax rates to as low as 15 percent.
“We have to bear in mind that it takes time for investment decisions to unfold and for productive systems to be re-oriented towards exports so we have to exercise patience,” said Dr Kereke.
Former Finance Minister in the inclusive Government and Harare East MP, Mr Tendai Biti (MDC-T) said there was nothing to celebrate on the Budget, adding that the $4,1 billion revenue target and 3,2 percent growth rate was not sustainable in an economy where by Minister Chinamasa’s admission, capacity utilisation was as low as 36 percent.
He said while Minister Chinamasa’s political engagement with the West was positive no one was listening to him.
“He is just going through formalities because the Constitution demands that he goes through the formalities of the Budget.
“At the end of the day he is playing ‘feja feja’ with the economy, it’s a micky mouse Budget but he has no option,” Mr Biti.
“Don’t protect an economy where people are not producing, so there is much protectionism but who is producing? Don’t do what you are not supposed to do.
“Also we are in recession. We actually feel sympathy for him because the job is simply too big for a minister who is controlled and captured by politics. Chinamasa is a prisoner of predatory politics.”
Another former Cabinet Minister in the inclusive Government and Kuwadzana MP, Mr Nelson Chamisa (MDC-T) said the Budget statement was an admission of an economy that was insolvent.
He said the admission that thousands of companies had closed was an indictment on the Government.