CHOMBO PREACHES FIS­CAL DIS­CI­PLINE Bud­get deficit could rise to $1,8bn: Chombo SEZs need sound in­vest­ment sys­tem: Mu­denda

Chronicle (Zimbabwe) - - Worldwide - Oliver Kazunga in Vic­to­ria Falls Oliver Kazunga in Vic­to­ria Falls

FI­NANCE and Eco­nomic De­vel­op­ment Min­is­ter Dr Ig­natius Chombo says the 2017 na­tional bud­get deficit could rise to $1.82 bil­lion from $400 mil­lion largely driven by the cu­mu­la­tive ex­pen­di­tures that are set to close the year at $5.6 bil­lion.

Speak­ing yes­ter­day dur­ing the 2018 Par­lia­men­tary pre-bud­get sem­i­nar un­der­way here, Dr Chombo stressed the need for fis­cal dis­ci­pline say­ing the bud­get deficit was largely fi­nanced through Trea­sury Bills and re­course to over­draft at the Re­serve Bank of Zim­babwe.

“In the out­look to De­cem­ber, cu­mu­la­tive ex­pen­di­tures are pro­jected to reach $5.582 bil­lion, up from the bud­geted $4.1 bil­lion,” he told del­e­gates.

“This would raise the bud­get deficit for the full year from $400 mil­lion to $1.82 bil­lion.”

The Min­is­ter said the in­crease in bud­get deficit was not sus­tain­able and un­de­sir­able. De­spite the en­vis­aged in­crease in Zim­babwe’s bud­get deficit by year end, he said 2018 over­all eco­nomic growth was ex­pected to av­er­age three per­cent sup­ported by agri­cul­ture, min­ing, con­struc­tion, tourism and Com­mu­ni­ca­tion Tech­nol­ogy.

“In­fla­tion­ary pres­sures, how­ever, threaten to in­crease to about 2.5 per­cent in 2018,” he said.

In line with Gross Do­mes­tic Prod­uct (GDP) growth, ex­ports were ex­pected to in­crease to $4.6 bil­lion and im­ports to $7 bil­lion.

Dr Chombo said rev­enues were pro­jected at $4 bil­lion com­pris­ing tax rev­enue amount­ing to $3.763 bil­lion and Re­ten­tion Funds ex­pected to raise $293 mil­lion.

“As part of strength­en­ing ac­count­abil­ity and trans­parency over pub­lic re­sources, Trea­sury from the 2018 Bud­get, will re­quire that all Rev­enue Re­ten­tion Funds are ap­pro­pri­ated by Par­lia­ment, and ac­counted for through the Pub­lic Fi­nan­cial Man­age­ment Sys­tem (PFMS) and in­te­grated into the Bud­get doc­u­men­ta­tion,” he said.

The 2018 na­tional bud­get, Dr Chombo added, would strengthen fis­cal dis­ci­pline and im­prove the cred­i­bil­ity of the fis­cal state­ment through ad­her­ence to an­chors such as lim­it­ing bor­row­ing from the RBZ as well as re­duc­ing Gov­ern­ment debt to GDP ra­tio. — @ okazunga. In­for­ma­tion THE 2018 fis­cal pol­icy state­ment should pro­vide a sound in­vest­ment frame­work to en­sure the suc­cess of Special Eco­nomic Zones (SEZs) and mo­bil­i­sa­tion of do­mes­tic re­sources to foster eco­nomic growth.

The Speaker of Par­lia­ment, Ad­vo­cate Ja­cob Mu­denda, said this yes­ter­day while of­fi­cially open­ing the Par­lia­men­tary pre-bud­get sem­i­nar for leg­is­la­tors and Cab­i­net min­is­ters here.

“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.”

Adv Mu­denda said the gath­er­ing should come up with lo­cal re­source mo­bil­i­sa­tion strate­gies to guar­an­tee Gross Do­mes­tic Prod­uct (GDP) growth in 2018 and the nar­row­ing of the bud­get deficit to four per­cent. He said the 2018 fis­cal year would be un­der im­mense spot­light as it was the fi­nal year in the im­ple­men­ta­tion of ZimAs­set.

“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.

He, how­ever, said the up­com­ing fis­cal pol­icy state­ment presents an op­por­tu­nity for a pru­dent and tar­geted re­sponse to the well doc­u­mented so­cioe­co­nomic chal­lenges fac­ing the coun­try.

The Speaker also spoke about the delin­quen­cies of mis­placed lend­ing, nar­row com­po­si­tion of ex­ports, large quan­ti­ties of money tied up in Real Time Gross Set­tle­ments bal­ances and se­cu­ri­ties, and dwin­dling for­eign as­sets among oth­ers.

The gath­er­ing also noted with con­cern that Zim­babwe was re­ceiv­ing lit­tle For­eign Di­rect In­vest­ment (FDI) of around $300 mil­lion com­pared to other re­gional coun­tries such as Mozam­bique and Zam­bia, which have been at­tract­ing in ex­cess of $3bil­lion and nearly $2 bil­lion re­spec­tively since 2011.

“Against this back­ground, our con­tin­ued fo­cus on do­mes­tic re­source mo­bil­i­sa­tion thus re­mains rel­e­vant and timely since we are ex­pe­ri­enc­ing in­ad­e­quate for­eign di­rect in­vest­ments. Par­lia­ment, work­ing very closely with the ex­ec­u­tive, should come up with strate­gic pol­icy and le­gal frame­work par­a­digm shifts at­trac­tive to for­eign di­rect in­vestors, al­beit not ig­nor­ing do­mes­tic in­vest­ments,” said Adv Mu­denda.

He called on the leg­is­la­tors to mar­shal in­no­va­tive and cre­ative ideas to en­able Zim­babwe to af­firm its re­source­ful­ness. There­fore, he said, it was im­per­a­tive that the coun­try’s poli­cies and strate­gies be aligned to can­vass­ing for a ro­bust bud­get in the con­text of lim­ited re­sources.

The con­fer­ence ac­knowl­edged the im­mense con­tri­bu­tion and as­sis­tance re­ceived from co-op­er­at­ing part­ners who con­tinue to as­sist Gov­ern­ment through tech­ni­cal and fi­nan­cial as­sis­tance. — @okazunga.

Dr Ig­natius Chombo

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