Mid-term budget…‘Review expected to stimulate industrial growth, save jobs’ Minister Patrick Chinamasa

PATRICK CHINAMASAAOliver Kazunga Senior Business Reporter
FINANCE and Economic Development Minister Patrick Chinamasa will present the 2015 mid-term national budget review statement tomorrow amid expectations the fiscal policy will focus on measures to stimulate industrial growth.

A top ministry official who requested anonymity for professional reasons said yesterday:

“The minister will present the mid-term budget review on Thursday (tomorrow).”

Economic analysts have said creating an enabling business environment should dominate the minister’s statement to attract more investment and save jobs.

“From a general perspective, we’re looking at a budget that would stimulate production. We expect more of a sustenance budget because you can’t talk of expansion. The mid-term fiscal policy statement comes at a time when there’re a lot of discrepancies in promoting economic growth,” said Ndawo Khumalo from Bulawayo.

“For instance, at the moment the country’s exports are lower than imports and such a scenario creates a lot of discrepancies to the Gross Domestic Product.”

He said the government should create an enabling environment for industry to grow.

“In June, the government increased import duty on vehicles. To some extent that improves the country’s revenue base. However, on the other hand, we want a scenario where import duty isn’t increased so that more cars come in and when that happens it means increased usage of fuel.

“As a result, the government will realise more revenue from excise duty on fuel and will become a long term investment to the government as it’ll continue benefiting from such a tax head,” said Khumalo.

Other analysts also said they expected Minister Chinamasa to tame the rampant termination of employment contracts by companies in the wake of a recent Supreme Court ruling.

More than 6,000 have lost their jobs in less than two weeks after the court of appeal ruled that companies can dismiss workers on three months’ notice only without packages.

“We don’t want a budget policy that will perpetuate the sacking of tax payers because that will again have serious repercussions on economic growth,” said Khumalo.

Another economic analyst, Chipo Warikandwa, said the fiscal policy should focus on promoting growth of the export sector as well as creating an enabling environment to improve industrial capacity utilisation.

“The Confederation of Zimbabwe Industries has projected that if the prevailing economic climate continues for the remainder of the year, capacity utilisation in the manufacturing sector is likely to decline further to around 29 percent from 36,3 percent. It’s now imperative for the Minister of Finance and Economic Development to come up with measures that would work on improving capacity utilisation,” she said.

Wilfred Dlamini echoed similar sentiments adding that the budget review should be premised on policies that promote economic growth to avoid losing the gains the country has realised so far.

He said the government should indicate the measures it was adopting to reduce employment costs within the civil service.

Last December, Minister Chinamasa presented a $4,1 billion budget where $3,32 billion, representing 81 percent of total expenditures would go to employment costs, leaving a balance of $798 million for operations, debt service and capital development programmes.

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