Chinamasa’s budget delay indicates dire state of Zim economy

via Chinamasa’s budget delay indicates dire state of Zim economy | SW Radio Africa by Nomalanga Moyo  November 5, 2013 

ZANU PF Finance Minister Patrick Chinamasa is now facing the grim reality that “his party cannot rig the economy as they did the election”, an economist has said.

Chinamasa told a pre-budget summit, which ended at the weekend in Victoria Falls, that there will be no budget statement in November as was widely expected.

The national budget will now be presented “possibly in December” or in time for the constitutional deadline of January, to allow the Minister more time to consult.

But Harare-based economist Vince Musewe says the country is facing a crisis, and no amount of consultation will generate revenue where there is none.

Speaking to SW Radio Africa Tuesday, Musewe said: “Many companies are closing down for lack of disposable income, and this means that the revenue base for the government is dwindling as they can’t collect taxes from employees or firms.

“Any budget must first determine the revenue base that it gets. Until you can resolve revenue issues, there is little point in presenting these budgets.”

Musewe said one option out of the current scenario is through borrowing, but added that this will be a tough call for the country given its terrible credit record.

“We even have a Treasury that raids private accounts and refuses to pay and this fans a genuine lack of confidence and uncertainty in the system. It is not surprising that no-one is putting money in the system and the sooner government realises that we are in a crisis and starts addressing this the better,” Musewe said.

The first option is to implement democratic reforms and then go cap in hand to the West to request emergency relief, the economist said.

Given the country’s poor credit history, very few lenders will be willing to lend, as has already been demonstrated recently when even regional countries declined Zimbabwe’s request for money to fund its polls.

Last month, Chinamasa was in Washington where he tried and failed to negotiate financial support and a write-off of the country’s estimated $11 billion debt owed to multilateral lenders.

The second option Musewe said, is to raise revenue from the country’s vast resources, but this calls for transparency, accountability and sound economic policies, which the current administration has been unwilling to subscribe to.

“We can talk about the country’s mineral wealth which should be funding the budget, but the opaque deals which ZANU PF signed during the coalition government were never meant to benefit the country but were aimed at enriching a few individuals and groups within that party.”

The Chinese, ZANU PF elites and the country’s military control the country’s murky diamond sector, as revealed by international rights group, Global Witness.

The country sits on one of the world’s largest diamond deposits and the world’s second largest platinum reserves, in addition to an array of other mineral riches.

Last year diamond revenue from Marange was expected to be in the region of $600 million, but despite government owning a 50% stake, nothing had been remitted to Treasury by June this year.

Last month, the ZANU PF government launched another of its many economic blueprints ostensibly aimed at providing “a new trajectory of accelerated economic growth and wealth creation.”

Musewe dismissed this as pie-in-the-sky: “We must begin to implement genuine reforms and move the country towards a democratic environment. Without that, we can talk and have economic blueprints but the reality is that people are starving and need food.

“We are facing a self-manufactured crisis and Mugabe’s government needs to shun past mistakes and take full responsibility for what it has created. The country needs friends and if indeed China is a friend, why aren’t they giving us financial support?

“Now that the elections are over, people are going to realise that ZANU PF will not be able to rig the economy to fulfil its election promises of hiking wages, providing, water, electricity, as Morgan Tsvangirai warned.”

Musewe’s observations come at a time when health institutions are facing major challenges such as dilapidated infrastructure and a lack of medical supplies. Health Minister David Parirenyatwa last week pleaded with the private sector to step in and adopt wards for renovation, in a bid to resuscitate the ailing institutions.

 

COMMENTS

WORDPRESS: 20
  • comment-avatar

    Mature economic assessment but you too politically correct to predict the imminent return of gono dollars to shore up recurrent expenditure deficit in budget shortfalls. Off to China to getrenimbi yuan to be multicurrency to help plug the runaway gap in choking balance of trade anomalies of burgeoning imports against meltdown of non-diamond exports. 2008 will seem like a good year guys.!!!!!

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    Tiger Shona 7 years ago

    It could not happen to a nicer group of people.
    This crises was totally made by Zanu PF.
    They have trashed this economy to smithereens, constantly insulted people and countries that could help us.
    Let this toxic and arrogant Chinamasa eat humble pie.
    An enemy of the people of Zimbabwe.

  • comment-avatar
    Tsuro Magen'a 7 years ago

    MaSanctions and Chematama causing this….”lets get rid of this animal called GNU and we will remake Zimbabwe” We wait.

    If I black Zimbabwean cannot trust ZANU, Chinamasa and Mugabe(ZCM) Company, who can ever trust them. Who can trust a thief with his money.

    Even the Chinese, despite their trillions of Foreign investments are directing the bulk of it to other countries including America.

    They(Chinese) have seen how desperate ZCM Company is and they are getting our resources for a song in cahoots(sp) with the Army Generals who then siphon the money out. Poor Zimbabweans.

  • comment-avatar
    Blackhammer! 7 years ago

    Don’t know whether to cry or jump for joy. A double edged sword indeed. Never ever test the depth of water with both feet!

  • comment-avatar
    Austin Vuma 7 years ago

    Indigenise empower and employ. What a contradiction!!!!

  • comment-avatar

    Robert said it was the sanctions and as soon as these have been lifted zim will immediately recover over night.

  • comment-avatar
    goodlife 7 years ago

    Why not leave Chamatama alone for now I heard his exellence used hate language at Samkange’s burial against Chematama but why can’t we give him a break and get the economy right. He is surely not in this government so why cant we move on

  • comment-avatar
    Jenandebvu 7 years ago

    China is busy opening up its economy, trading with the west, east, north n south, but Zim gvt can’t see that. I hope Mwari anopindira atore mudhara, totanga patsva

  • comment-avatar
    Shebah 7 years ago

    What crisis is this reporter talking about. Delaying the announcement of a budget is a crisis, where did you do your night school. Mr Chinamasa is merely balancing the books with or without external support. Remember Brazil is bring in 100 million for agriculture and China is still to announce its contribution.

  • comment-avatar
    William Doctor 7 years ago

    So where are the Chinese now? Let me guess, looting – not helping.

  • comment-avatar

    As usual Vince is right and speaks much common sense. Why do our government not tap into all the good men and women of Zimbabwe who have a lot to offer? In stead of isolating themselves ZPF should begin to build a nation; not just a party. On the spiritual side we forget that behind everything is what is God’s will and what isn’t. those who are spiritually discerning will know that Zimbabwe lie under a curse and death because of our hidden sin and unrepentant hearts. There is death on our economy and agriculture and industry because of our sin. we must not fool ourselves that the little pockets of these areas that thrive speak for the whole. They don’t. If Zimbabwe was in the Lord’s will we would be prospering and peaceful and everyone would have enough for each day. I am happy for those new farmers who were previously disadvantaged and now make a decent living but our agricultural saga is far from pleasing to a holy and just God. I urge all stakeholders to seek God’s will on the way forward for this so we can feed our nation and others. That our grain silos are empty speaks of reproach to our nation. Without repentance NO restoration. Pray!

  • comment-avatar
    munzwa 7 years ago

    he who has stolen the egg(election) will come back and steal the chicken(economy)

  • comment-avatar
    Shebah 7 years ago

    I think this Musewe attended a very poor night school. “Democratic reforms” to enable a budget to be produced. His second option ‘calls for transparency, accountability and sound economic policies’. To who, the electorate, the West, the East, America. How do you bring transparency and accountability when if you sell your diamonds you make sure that America does not know otherwise they take your money. Sound economic policy is there, the ZPF manifesto, very brilliant.

  • comment-avatar
    simon 7 years ago

    zanu….reap what you sow. we wait and see how you are going to deliver…..

  • comment-avatar

    Hand the country over to people who can run it with all sanctions in place and we will have this place thriving in a heartbeat, plus we will have investment and progress, and every dogeater will be back in China where they belong. Chinamasa is a fool and has no clue what he is doing in this portfolio, and the bigger fool is the idiot who put him there.

  • comment-avatar
    Shebah 7 years ago

    GBZ are you calling the majority Zimbabwe who voted for ZPF fools. Tswangirai told us that when he comes into power he would chase us from the farms, what a fools he was. And you now call us fools!!!! The President said its very difficult to deal with ignorant people, fools are some times not that ignorant.

    • comment-avatar
      Pastor 7 years ago

      The majority of Zimbabwe voted for Zanu-PF ? When exactly my child ?

  • comment-avatar
    Tabvuma 7 years ago

    I will always remember these words zviroto zviroto (dreams are dreams) here we go ZANU , we are waiting for you to deliver.

  • comment-avatar
    Shebah 7 years ago

    You are right Tabvuma zviroto zviroto as long as you dont waste time waiting for the rain

  • comment-avatar
    nnyati 7 years ago

    Let us leave a history that depicts the fear of God. Regai kutukana mumapepa vana veZimbabwe. Make cobtributions that educate each other. You talked of our children reading these contributions???? Wat do they learn. If you are serious sbout building the country put your full names and truly advise. Haikona kungotaura zvinyadzi. Ityai mwari.