Expansionist budget needed

via RadioVop Zimbabwe – Expansionist budget needed 01/11/2013  By Sij Ncube

More than 300 ZANU PF and MDC parliamentarians are meeting in the resort town of Victoria Falls for a pre-national budget conference with high expectations the legislators will come up with a plan that should stimulate economic growth. 

There are concerns the country’s economy is slowing down, resulting in the closure and liquidation of several companies in the past year.

Analysts told Radio VOP that the legislators should draw up an expansionist national budget to revitalise the economy which critics say has been stagnant since the termination of the coalition government mid this year.

Expectations are high the budget would take into cognisance Zanu PF election promises, particularly job creation, revival of industries and a full roll-out of economic empowerment policies targeting the poor.

Analysts say the national budget should be seen to be encouraging more investment on social services, water health and education. The legislators should also ensure that the budget factored in measures to address a fall in government revenue as well as formulate policies that would result in direct foreign investment.

There is a general consensus the new budget should be pro poor and seek budgetary support from donors.

Economist John Robertson pointed out that the government is struggling with reduced revenue in taxes as there are few firms that are operating profitable.

“Also the buying power of people is declining as workers are losing jobs. Job creation should be a priority of the 2014 budget,” said Robertson, adding that the government should help the private sector create jobs by creating an investment friendly environment.

But he cautioned that no serious investor would pump money in the country as long as controversy remained over the government’s black economic empowerment law which requires foreigners to surrender 51 percent of their stake to indigenous Zimbabweans and the punitive tax regime.

“It appears the money to start business is always going up because we have an investment unfriendly climate.”

There have been suggestions from other quarters for the government to impose prohibitive import taxes to protect the local manufacturing industries, particularly the clothing and textile sectors which have collapsed due to cheap imports from the Far East.

But Robertson said it would be wrong as local manufacturers were battling operation challenges due to a harsh economic environment.

George Mukamba, an official with the Bulawayo Business Arise, chipped in, saying the budget should prioritise revival of industries.

“The budget should address the re-capitalisation of critical areas particularly in Bulawayo in the manufacturing and agricultural sectors. The 2014 budget should be an implementation strategy for the recently unveiled Zanu PF economic policy,” said Mukamba.

He estimated that the manufacturing sector would need $2 billion while agriculture would need $3 billion.

The Zimbabwe Congress of Trade Unions wants a pro-poor budget which recognises that the bulk of workers in the country earn above the poverty datum line estimated at over $500.