Reduce borrowing, rationalise existing burden

THE year 2022 has been characterised mainly by runaway inflation, deepening poverty, widening inequalities between the rich and the poor; soaring public debt and the climate change crisis — all felt especially by the poor in Zimbabwe.

As a result, expectations from Finance minister Mthuli Ncube’s 2023 budget presentation and President Emmerson Mnangagwa’s State of the Nation Address were directed towards measures that ease the suffering of the poor mass.

Such measures include tax relief, fiscal policy discipline controls and increased social protection systems, among others.

After the fact, we note the positives in both addresses, but it seems that both fail to adequately satisfy the expectations of the poor, raising concerns for the coming year.

A preview of the 2023 National Budget

The 2023 National Budget announced on November 24, 2022 has a total expenditure of $4,5 trillion, which is US$5,6 billion using the parallel market rate of US$1:$800 and US$6,9 billion using the official ruling exchange rate of US$1:$646.

This was against a national anticipation of a US$9 billion national budget if Zimbabwe is to attain an upper-middle class economy by 2030.

An evaluation of the 2023 National Budget shows deep public policy politics and how wholesome populistic policies have undermined optimum resource distribution according to national challenges.

As government’s tradition, the security sector has been given a huge allocation despite the fact that Zimbabwe is experiencing both negative and positive peace.

It is rather worrying that the number of war veterans continues to increase from 34 000 in 1997 to 142 000 in 2022.

Despite such increase, what boggles the mind of the citizens is that 142 000 war veterans have been given $46 000 000 000 (US$57,5 million) which is 1% of the total budget, while social protection has been given $50 400 000 000 (US$63 million) which is 1,12% of the total budget.

This is despite the fact that Zimbabwe’s social protection is in a dire situation with 3,8 million rural people facing food starvation and 1,6 million urban starvations, 4,6 million children living with severe acute malnutrition and 4,8 million children in need of Basic Education Module Assistance.

Therefore, if one is to take into account these allocations, it is justifiable to argue the budget is anti-poor, is not inclusive and it disregards the plight of the marginalised and vulnerable citizens.

Of key concern is that Ncube declared a public and publicly guaranteed debt estimated at $2,2 trillion (US$3,4 billion) for domestic debt and US$14 billion for external debt as at end September 2022.

While this figure may be contested, what is concerning is the absence of resolution on how to reduce borrowing and rationalise the existing burden.

It is currently unknown where this money went and a debt audit remains the necessary step. Zimbabwe Coalition on Debt

and Development