‘Shallow’ budget adds to Zim’s misery

FINANCE minister Patrick Chinamasa yesterday announced desperate measures to bankroll the 2017 National Budget, with strange proposals to further tax airtime and mobile data to fund the health sector, while keeping mum on the contentious issue of payment of bonuses for civil servants.

Source: ‘Shallow’ budget adds to Zim’s misery – NewsDay Zimbabwe December 9, 2016



In his $4,1 billion budget, which was largely dismissed by economists and opposition parties as hollow, Chinamasa proposed a 5% levy for every dollar spent on airtime to fund the new Health Fund Levy, with effect from January next year.

Opposition MPs described the budget as a mere rhetorical blunt statement, which failed to tackle the relevant issues on the ground and dismissed it as anti-poor people.

“Government aims to attain the highest possible level of health and quality of life for all citizens, as this allows full participation in the economic development of the economy, and in order to attain this vision, every citizen has to access comprehensive and effective health services,” Chinamasa said.

“It is critical that all economically active individuals contribute towards funding health services, and it is, thus, proposed to introduce a health fund levy of 5 cents for every dollar of airtime and mobile data, under the theme Talk, Surf and Save a Life.”

He said the resources to be collected from the Health Fund Levy would be ring-fenced for the purchase of drugs and equipment for public hospitals and clinics because the shrinking tax base had constrained government’s capacity to invest in the public health delivery system, which is now being augmented by resources from development partners.

The budget, which came two days after President Robert Mugabe’s dour State of the Nation Address, was also silent on civil servants’ salaries and bonuses.

Instead, Chinamasa only announced plans to launch a housing project for civil servants with beneficiaries contributing $50 monthly towards servicing of their residential stands.


In another desperate measure likely to squeeze local authorities and power utility, Zesa, Chinamasa announced a tariff freeze on water and power – a move dismissed as populist and meant to endear the ruling Zanu PF party with the electorate ahead of the 2018 elections.

“This will include charges on water, power, rates, local taxes and environmental requirements, among others. Any increase in prices will have to be justified and considered on its merits,” he said.

In another move also seen as meant to curry favour with the electorate, Chinamasa reintroduced the Constituency Development Fund, where each constituency would receive $50 000, but opposition MPs dismissed the move as a campaign gimmick.

Parliamentary Portfolio Committee on Finance chairperson, David Chapfika defended Chinamasa, saying the Treasury chief had tried his best to ensure there would be money for critical sectors given the constrained fiscal space.
Chinamasa also announced a freeze in salaries and allowances of boards and management of State enterprises and parastatals, local authorities and other public entities.

He said the Office of the President and Cabinet was co-ordinating work towards development of a consistent remuneration framework.

“The employment costs for 2016 from January to October 2016 were $2,63 billion, which is 91% of total revenues, and this put too much pressure on the National Budget and it should not be repeated in 2017,” Chinamasa said.

To support women’s reproductive health, he proposed duty-free raw material imports for sanitary wear.

The Finance minister said in order to protect local bus assemblers, resuscitate downstream industries, as well as create employment, government in 2014 had introduced customs duty of 40% on imported buses.

He said he was now proposing to ring-fence importation of 30 luxury buses at a reduced rate of 50% for 12 months.

On traffic fines, he said driving a vehicle without a windscreen wiper will attract a $10 fine, up from $5; driving without head or side lights will attract a fine of $10, up from $5, cutting corners when turning right will attract a fine of $15, up from $10; overtaking over a solid line has gone up from $20 to $30, and the fine for having non-functional footbrakes has gone up from $20 to $30 to reduce carnage on the roads.

On paraffin, he said there had been a surge in import volumes of the liquid, which was being abused by people mixing it with diesel to achieve higher profit margins.

Chinamasa said to curb this, duty on paraffin would be aligned with that of diesel at a rate of 40 cents per litre with effect from January.

The biggest allocation from the budget was to the Primary and Secondary Education ministry, which got $803,7 million, followed by Home Affairs, $364,4 million, and the Defence ministry, which got $340,5 million.
The Health ministry got $228,9 million of which $223 million will go towards staff salaries.

Contrary to public expectations, Chinamasa allocated a paltry $9,8 million to the Zimbabwe Electoral Commission and $2 million to the Zimbabwe Human Rights Commission.

Chinamasa said the austerity measures he announced would only bear fruit if policy inconsistencies in government were addressed, saying they were derailing his re-engagement efforts with international financiers and poking holes in the country’s economic recovery prospects.