Chinamasa’s bag is empty

via Chinamasa’s bag is empty 3 December 2014 by Jera

Finance Minister Patrick Chinamasa arrived at Parliament wielding the famous treasury briefcase. In the prosperous era of Bernard Chidzero – our equivalent of Pharaoh’s seven years of plenty – the country used to look on in awe as the Finance Minister held up his briefcase before the budget presentation. Chinamasa may as well have dispensed with the briefcase ritual because even he knows his bag is empty.

The minister announced a budget of $4 Billion, which is about the same as last year. He proposed tax incentives for exporting companies. But the question is how many such corporations remain? Since 2011, 4,160 companies shut down, resulting in 55,443 job losses.

To his credit, Chinamasa has been bold enough to make statements which ordinarily would not be heard coming out of Zanu (PF). He said there was need for Zimbabwe to mend bridges with the West. Unfortunately, it matters little if the minister has all the good intentions, as long as the leadership will ruin these efforts by the usual tactless utterances of ‘filthy sanctions.’

Of late there have been signs that the West would like to reengage Zimbabwe, but it remains to be seen if they continue to reach out, given the likely ouster of Mujuru and the total demise of democracy as Mugabe now picks his own VPs. There has been a trend (or coincidence) whereby visiting Western delegates appear to sidestep Mugabe, preferring to meet with VP Mujuru and other government officials.

In the aftermath of the budget presentation, the finance ministry has announced a target to reduce labour costs, from the current 82% of total revenue to 35% by 2018 – an unrealistic target, given the fact that the bulk of wages are for essential sectors, education and health. Perhaps it is not about the government wage bill being too high but revenue being too low. Company closures, retrenchments, decline of agriculture, leakages in the mining sector and the informalisation of industry have shrunk the revenue base.