Source: EDITORIAL COMMENT: Budget should resolve crisis | The Financial Gazette November 24, 2016
FINANCE and Economic Development Minister, Patrick Chinamasa, is expected to deliver the National Budget for 2017 on December 8, 2016.
Public expectations are high, especially considering that the economic environment is worsening and there are fears that there is a real possibility that Zimbabwe could plunge into a crisis comparable to the one experienced during the years leading to 2008.
The budget is likely to be presented when the country would have finally launched the contentious bond notes, whose introduction was first announced in May.
There is public resistance to the planned introduction of the bond notes, with manufacturers, through the Confederation of Zimbabwe Industries, rejecting the so-called surrogate currency in toto. The Zimbabwe Congress of Trade Unions has similarly expressed grave concern over the planned currency. These concerns are predicated on the suffering of the past, and justifiably so.
Retailers, however, insist Zimbabwe should not he held hostage by fears of past experiences, and have backed the proposed new currency, which now has the backing of legislation, although this is being contested in court.
Zimbabwe requires radical measures to extricate itself from the current quagmire, and the country may have now reached a point where it may have to give the central bank the room to experiment the bond notes to see if it can give succour to a nation that has suffered for too long.
But the bond notes should only act as a stop-gap measure to give temporary relief to the economy, while long-term solutions are sought to permanently repair this economy.
The biggest challenge for the 2017 National Budget statement will, therefore, be to inspire public confidence and cultivate the trust needed to get this economy working again.
Our manufacturing sector is dead, with the few industries that have survived operating at minimum capacity. The agricultural sector is equally in the doldrums, forcing the country to import basic food commodities and in the process exporting the little stock of United States dollars or foreign currencies it had earned. This has essentially drained liquidity from the economy.
We, therefore, hope that the budget will announce measures to ensure that these two key sectors are revived. We hope there will be measures in Chinamasa’s budget to also ensure that the mining sector, which has critically supported this economy since dollarisation in 2009, is allowed to grow.
The International Monetary Fund has indicated that the economy will contract this year and that it will shrink by a further 2,5 percent next year.
We hope there will be good rains to augment any efforts government will take to turnaround this economy and ensure growth next year. The command agricultural project, while sound, should be guarded against potential abuse.
The views given by the business sector during pre-budget consultations should be taken into account, as well as any thoughts proffered by the trade unions.
Together, we can make Zimbabwe great again.