LIVE BLOG: Mid-term Fiscal Policy Review

Source: LIVE BLOG: Mid-term Fiscal Policy Review | The Herald September 8, 2016

Updates by Costa Mano

1556: We now bring an end to our live updates. We will be providing the link to the downloadable document HERE as soon as we have it. Thank you for joining us.

1554: Minister Chinamasa has finished his address.

1540: “Implementation of the Ease of Doing Business (EDB) Reforms to improve the investment climate as well as strengthening Zimbabwe’s competitiveness in the global arena is advancing well. Improvement in the country’s Ease of Doing Business ranking from 171 last year to 155 this year, therefore, bears testimony to the positive trajectory of our reform initiatives.”

1534: “Construction of the Mabvuku Turn-off Road Over Rail Bridge structure, initially targeted for completion by end February 2016, is now complete and has since been opened to traffic. Works on the Victoria Falls Airport new terminal building, runway, control tower, sewer reticulation system, aprons as well as the fire station have all been completed and are now in use.

“With regards to the Harare International Airport runway, rehabilitation works resumed in January 2016. However, being a live runway limits the available working hours during which to carry out rehabilitation works.”

1530: “In order to facilitate increased investment opportunities in the tourism industry, Government renewed Statutory Instrument 5 of 2016 for the purposes of exempting tourism operators from paying duty for the importation of capital goods.”

1529: “To promote inflows of tourists into the country, Government re-classified 37 countries from Category C to B, and moved Seychelles from Category B to A. Mr Speaker Sir, Category A refers to countries whose nationals do not require a visa, while Category B refers to countries whose nationals are granted a Zimbabwean visa at a Port of Entry on payment of requisite visa fees. On the other hand, Category C country nationals are required to apply for and obtain a visa prior to travelling to Zimbabwe.

“Therefore, the relaxation of the visa requirements through reclassifications should increase socio-economic benefits from the SADC and other source markets. Visa requirements were also relaxed for Chinese and Turkish nationals on tourism trips arranged through Travel Agents and Tour Operators.”

1527: “Mr Speaker Sir, given the structural shift in our economy, small and medium enterprises are increasingly becoming a major driver of economic growth and development, enhancing employment opportunities and poverty alleviation. Mr Speaker Sir, sectoral inter-linkages have become a fundamental strategy for promoting growth through the integration of large numbers of SMEs with established companies within an industry.”

1523: “The increase in platinum revenues from US$185 million to US$396 million in the first half of 2016 was on account of output gains which were at 7 968 kg in the first 6 months of 2016, up from 4 919 kg registered during the comparable period in 2015.

“Hwange Colliery is producing on a contract basis (Mota Angil) on average only 150 000 tons per month, against potential capacity of about 300 000 tons, despite Government efforts to support the company. The company made a loss of US$115 million in 2015 alone. Government is exploring scope for shedding off some of Hwange Colliery’s non-core operations, including rationalisation of its workforce from the current 3 200 to levels that are commensurate with production,”

1516: “Furthermore, Government will support smallholder cotton growers with agriculture inputs to put 350 000 ha under a supervised cotton production programme. The programme is estimated to cost US$36 million to finance the procurement of fertilizers, chemicals and cotton seed, as indicated above.

1515: “Mr Speaker Sir, in terms of fertilizer, the introduction of the Special Maize Production Programme has raised fertilizer requirements for the season to 232 500 tonnes of AN and 285 000 tonness of compounds. Local fertilizer companies have assured Government and farmers of their readiness to play their part with regards to supplies.

“In this regard, current fertilizer stocks stand at 60 000 tons of top dressing, and 40 000 tons of compounds, which are sufficient to kick start the agricultural season. The balance will, however, be met through additional fertilizer production and imports.”

1512: “This year’s estimated maize grain harvest of 511 816 tons falls short of the normal national grain requirement of 2.2 million tonness. Government interventions to provide for the national maize grain deficit of 1.7 million tons are being complemented by private sector and development partners’ imports.

“In this regard, as at 29 July, Government had procured imports of 188 831 tons of maize, costing US$71.5 million. On the other hand, the private sector has so far imported 278 000 tons in the form of both maize and mealie meal, worth over US$100 million.”

1510: “Payments made by Government so far to farmers for deliveries to the GMB this marketing season amount to US$60.3 million, leaving a balance of US$7.7 million, which is currently being processed. Resultantly, the GMB is currently holding 273 000 tonness of maize in stock, inclusive of imports, which at an ex-GMB off-take rate of 35 000 tonnes per month represents seven months of GMB sales.”

1509: “With regards to maize production this year, indications are that output will be around 511 816 tons, against the initial projection of 450 000 tonnes. The higher than anticipated output is attributable to good rains received in the second half of the season that helped some of the late planted and re-planted maize crop.

“Mr Speaker Sir, as at the end of August 2016, cumulative deliveries to the GMB from local farmers stood at 175 000 tons, worth US$68.3 million. The un-anticipated deliveries are attributed to our timeous payment to farmers as they deliver. Currently, payments are being made within 14 days of delivery.”

1507: “Decline in agricultural output of 4.2% comes even after taking account of rainfalls from January, which allowed some maize replanting in some farming areas. Tobacco, which is our main source of liquidity, recorded sales of 201 million kgs of crop as at 2 September 2016. This surpasses the targeted crop of 170 million kgs for the year. The average price so far is US$2.94 per kg, close to that for 2015.”

1501: “Efforts are ongoing to decongest the Customs Controlled Area through the removal of Unauthorised Persons from the Customs Controlled Area. The Ministry of Home Affairs, as the lead agency, ensures order and security at the ports of entry.”

1500: “During the period January to June 2016, revenue under-performance against over-expenditures resulted in a cumulative budget deficit of about US$623.2 million, far above the full-year target of US$150 million.

“Financing of the Budget deficit has been primarily through issuance of treasury bills by the Reserve Bank on behalf of Government.”

1458: The import bill remains unsustainably high….the need for implementation of the Diaspora Policy is urgent.

1455: “Mr Speaker Sir, under the theme “Building a Conducive Environment that Attracts Foreign Direct Investment”, the 2016 National Budget primarily focuses on continued implementation of Zim Asset over the period 2013–2018, with the goal of transforming Zimbabwe into an industrialised State, capable of affording its people better standards of living.”

1453: Minister Chinamasa is now addressing the Parliament of Zimbabwe.

“Mr Speaker, I rise to present this year’s Mid-Year Fiscal Policy Review, complying with Section 7 (2) (a) of the Public Finance
Management Act.

“ This requires the Minister responsible for Finance to “provide full and transparent accounts, from time to time and not less than annually to Parliament, indicating the current and projected State of the Economy, the Public Resources of Zimbabwe and the Fiscal Policy of the Government.”

1445: We will be giving you live updates on the Mid-term fiscal policy review to be presented by Minister of Finance and Economic Development Patrick Chinamasa in Parliament this afternoon.