Mthuli Ncube must address critical issues
NEXT week, Finance minister Mthuli Ncube returns to Parliament to review his 2021 spending plan — a blueprint that he presented in November 2020. The National Budget, worth $421,6 billion, was already higher than projected revenues of $390 billion, which means Zimbabwe started the year at a huge disadvantage, with a huge deficit. But given developments that have taken place so far, including a 40% rise in prices last month and a bloodbath on the job market where more than 500 000 people lost employment to the COVID-19 pandemic alone (according to World Bank estimates), the economic situation has gotten worse.
Even though the authorities have denied this reality on the ground, it is clear that the scale of suffering has deepened.
COVID-19 has aggravated a health crisis, and the cost of containing it is beyond what a frail economy can absorb. It is unfortunate that the COVID-19 pandemic came when Zimbabwe was already battling a health crisis.
This means that the interventions towards jump-starting the country’s health delivery system must be significant. And so will be fresh interventions redirecting public finances towards needy areas, in particular, increasing cash handouts to vulnerable societies.
The US$3,50 per month had an insignificant effect on hungerstricken families when it was introduced last year. Neither is it today, given that the breadbasket has rocketed to over $40 000 per month.
The country’s Finance minister must move with speed to deal with this problem and revise these stipends to match price rises.
We believe there should be no room for complacency.
Ncube must not be complacent about making impactful reviews on tax-free thresholds for the few Zimbabweans still formally employed given that $20 000 is only half of what the family breadbasket now cost.
Since the budget was announced last November, prices have rocketed.
In towns, property owners have been and are demanding rentals in foreign currency, which can only be accessed on the expensive black market, given that firms are paying their employees in Zimbabwe dollars.
We have no doubt it is about time Zimbabweans are proud of their local currency. It is time to stimulate the economy, to make it tick again.
Trading in a surrogate currency is always problematic, but it is time to work on revamping the economy all-round and instil confidence in the average Zimbabwean without having to rely on the parallel market.
And so, the benefits of giving relief to workers would extend beyond them and their families — spending power would improve with positive spinoffs in the economy that has been battered by diminishing disposable incomes.
An intricate balancing act would be crucial in next week’s review. The minister must try to forgo a few taxes and give companies tax reliefs and slash several fees that hinder investment.
This will have indirect benefits through unlocking employment opportunities, as well as giving struggling local authorities an opportunity to increase incomes through fees collected from business.
Our citizens do not need high-sounding words signifying nothing by the Oxford scholar-turned-minister!