Zimbabwe’s first post-Mugabe budget limits local ownership requirement
ON Thursday 07 December, Zimbabwe’s new government pledged to re-engage with international lenders, curb spending and attract investors to revive its battered economy.
In the first budget since last month’s removal of long-time ruler Robert Mugabe, Finance Minister Patrick Chinamasa also said the government would amend indigenisation laws, limiting a 51% local ownership requirement to just the platinum and diamond sectors.
The laws were designed to increase black Zimbabweans’ share of the economy, but were opaque and open to abuse — to the detriment of foreign investor confidence.
"As we focus on recovery of our economy, we must shed misbehaviours and acts of indiscipline which have characterised the past," Chinamasa told parliament.
To cut a budget deficit projected at more than 10% of GDP this year, he said the government would retire all civil servants aged over 65 and close some overseas diplomatic missions.
Government spending ballooned under Mugabe — part of the patronage machine that kept him in power for 37 years — with more than 90% of the budget going on civil servant salaries, leaving precious little for the investment needed to boost growth.