EDITORIAL COMMENT: Implement measures announced in Budget in their entirety
FINANCE and Economic Development Minister Patrick Chinamasa has presented a 2018 National Budget that can be described as bold, pragmatic, forward looking and progressive in the sense that it seeks to lay a firm foundation for the economic revival of Zimbabwe. The Treasury chief took no prisoners, announcing a raft of sweeping measures aimed at curtailing Government expenditure while stimulating production in key sectors of the manufacturing industry.
Clearly, it is no longer business as usual and the unambiguous message from the budget is that Zimbabweans need to tighten their belts, put shoulders to the wheel and work hard towards returning the country to respectability in the eyes of the rest of the world. The fiscal policy statement is anchored on President Emmerson Mnangagwa’s inauguration speech in which he called for reforms to be implemented to lure foreign direct investment, ensure financial stability, enhance the ease of doing business and focus more on the economy in particular fixing the current liquidity crisis.
The President also promised to adopt a tough stance against corruption and inefficient and incompetent government officials who stalled progress and “extort dirty money” from the public and investors. In his budget, Cde Chinamasa said Government would abolish 3 700 posts for youth officers and retire civil servants above the age of 65 starting January 2018 as part of measures to trim its expenditure among other interventions meant to revitalise the economy and restore investor confidence.
The $5.1 billion Budget, presented under the “New Economic Order”, reflects the new trajectory that seeks to deal with challenges facing the country and demands well thought-out and focused Government interventions to achieve rapid and sustained recovery that delivers on jobs.
Minister Chinamasa said the economy was expected to register a solid 4.5 percent growth in 2018 with a $5.1 billion budget comprising $4,3 billion from tax revenue, $237,2 million from non-tax revenue and $456,7 million from retained revenue as well as $100 million from grants. He said expenditures were proposed at $5,8 billion inclusive $456,7 million under retention. The minister said the era of indiscipline in Government expenditure, which has been blamed for creating an unsustainable budget deficit, must be stopped and announced a cocktail of cost cutting measures in the public sector.
These include maintaining a recruitment freeze of non-critical fields, reducing foreign travel delegations, closing technically insolvent parastatals, implementing a voluntary retirement scheme on civil servants to cut the wage bill, reducing diplomatic missions and trimming work benefits for senior officials such as fuel allocations, number of vehicles and cancelling first class travel except for the Presidium. A further 528 members of the public service without the requisite qualifications in terms of Section 18(4) e (ii) of the Public Service Regulations would be retired.
Rationalising the civil service, he said, was in keeping with President Mnangagwa’s first step towards a leaner Government structure, which has already reduced the size of the executive by trimming down the number of ministries from 27 to 21.
In this regard, Minister Chinamasa said savings will be realised progressively through identification of redundant staff, as ministries are combined and rationalised. “The overriding aspiration is upliftment of social-economic conditions of the populace, through making short-term sacrifices that allow the budget to play its rightful role in addressing production, job creation, and poverty reduction,” said Minister Chinamasa.
He said bold measures need to be taken to lay a solid foundation for growth across various sectors. “This requires that Government collectively acknowledges the risks and costs brought about by directing a disproportionate share of budget expenditures towards salaries, allowances and other consumptive expenditures, such as condition of service vehicles and travel, among others,” said Minister Chinamasa.
The cost cutting measures are envisaged to ensure budget deficit for 2018 is halved to below four percent of the Gross Domestic Product (GDP), and subsequently capping budget deficits below three percent in line with best practices and financing capacity of the economy.
We commend Minister Chinamasa for coming up with one of the best budgets ever formulated in the country and which speaks to the multi-faceted challenges confronting the nation. It is a refreshing departure from the past where Government tended to spend more than it made resulting in an unstainable budget deficit which impeded economic growth. The austerity measures he announced will free a lot of revenue which will be channelled towards productive sectors of the economy.
The bloated civil service is a drain on the fiscus and we urge Government to continue streamlining it. By adopting a reform agenda, Government is sending a loud and clear message to the international community that it is ready to do business. This move must be reciprocated through support for Zimbabwe in the form of soft loans to kick-start the economy and improve liquidity in the country. Government should also ensure that all the measures announced by Cde Chinamasa are implemented in their entirety.
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