EDITORIAL COMMENT: Zim needs to enforce fiscal discipline to drive economic growth

11 Nov, 2017 - 02:11 0 Views
EDITORIAL COMMENT: Zim needs to enforce fiscal discipline to drive economic growth Jacob Mudenda

The Chronicle

Jacob Mudenda

Jacob Mudenda

MEMBERS of Parliament and Cabinet Ministers are meeting in the resort town of Victoria Falls for the annual pre-budget seminar and we expect them to come up with sound recommendations that Treasury will take into account as it formulates the 2018 fiscal policy statement. Zimbabweans are looking to the 2018 budget with heightened anticipation as they expect the Minister of Finance and Economic Development, Dr Ignatius Chombo, to come up with a cocktail of measures to steer economic growth.

The Parliamentary pre-budget seminar is usually the pre-cursor to the presentation of the national budget and legislators will take into account the views of ordinary Zimbabweans collated during the nationwide pre-budget consultations by the Parliamentary Portfolio Committee on Budget and Finance. The seminar should therefore not be just a talk shop but a platform for legislators to robustly debate the issues raised by Zimbabweans and ensure that they are incorporated into the budget.

Officially opening the workshop on Thursday, the Speaker of Parliament, Advocate Jacob Mudenda, said the 2018 fiscal policy statement should provide a sound investment framework to ensure the success of Special Economic Zones and mobilisation of domestic resources to foster economic growth. “Your submissions today should enunciate the need for a well-grounded economic investment framework that is predicated on the Special Economic Zones (SEZs) whose enabling legislation has been passed by Parliament,” said Adv Mudenda.

“Parliament has to exercise intense oversight in order to ensure that the proposed SEZs are not white elephants but a sound bedrock for local resource mobilisation emanating from accelerated investment therein.” He also emphasised the need to come up with local resource mobilisation strategies to guarantee Gross Domestic Product growth in 2018 and the reduction of the budget deficit to four percent.

Adv Mudenda said the 2018 fiscal year would be under immense spotlight as it was the final year in the implementation of Zim-Asset. “As we take stock of the achievements made and challenges we have encountered, our people are expecting more localised solutions and interventions in order to consolidate the gains arising from the implementation of Zim-Asset,” said Adv Mudenda.

He also said the upcoming budget statement should address the debilitating issues of procrastination, indolence and inertia that has slowly become endemic and proving to be the biggest enemy in Zimbabwe’s bureaucracy apart from the scourge of corruption. “The question is, more than a decade down the line, where is the One Stop Investment Centre? Where is the Minerals Exploration Bill which will enable the country to precisely know the worth of our vast mineral resources underground that could underpin a profound growth of our Sovereign Wealth Fund?

“Where is the evidence-based informal sector formalisation policy, which ought to encourage its growth and development? Where is the revised Indigenisation and Economic Empowerment Act reconfigured in line with the Presidential Policy Directive of 14th April 2016? We must kill the vices of procrastination, indolence and inertia if we are to positively respond to the questions I have just posed,” said Adv Mudenda.

We applaud the candid manner the Speaker raised issues that are blighting economic growth. Indeed Treasury should prioritise implementation of the SEZs project as it is the panacea to the problems affecting the economy. Legislators also need to hold the Executive to account on this and many other pertinent issues around the economy.

The 2017 budget deficit, which could rise to $1,82 billion from $400 million on the back of cumulative expenditures, is totally unsustainable and needs to be brought down. The country is spending a lot of money it does not have through financing the budget deficit using Treasury Bills and an overdraft facility at the Reserve bank of Zimbabwe.

There is a need to accelerate local resource mobilisation by facilitating Foreign Direct Investment and exports. Inflationary pressures, which are threatening to increase to about 2,5 percent in 2018, should be contained. Unwarranted and wanton price increases by unscrupulous businesses should be stopped forthwith as they contribute to inflation.

We also agree with Adv Mudenda that the budget should address the debilitating issues of procrastination, indolence and inertia in the Government bureaucracy. A lot of well-meaning policies have not been implemented as a result of the rot and incompetence in the bureaucracy and this negatively affects the performance of the economy.

The 2018 national budget should therefore give direction to the country as it embarks on the final year of the implementation of its economic blueprint — Zim-Asset. It should put emphasis on fiscal discipline while spelling out ways of harnessing FDI and growing exports.

To contain inflation, Zimbabwe needs to stimulate the manufacturing sector so that imports are reduced. The budget should also outline provisions for the upcoming agricultural season because the country needs to consolidate the gains made in 2017 with another bumper harvest.


Share This: