‘Expect a balanced 2019 Budget’
FINANCE and Economic Development Minister Professor Mthuli Ncube will on Thursday present the 2019 National Budget, which will give effect to interventions propounded in the Transitional Stabilisation Plan.
Prof Ncube’s inaugural budget since President Emmerson Mnangagwa appointed him to the post in September will set the trajectory for creation of an upper middle-income economy by 2030.
In an interview last week, Prof Ncube said he would balance austerity with incentives for productive sectors and sustainable livelihoods for ordinary people.
“It will be a balanced budget with enough carrot and also decent stick; but hopefully more carrot than stick because we want to recreate that environment of confidence, to build confidence going forward,” he said.
“We want to make sure that there are enough incentives for industry and also that there is job creation. We want to regulate certain behaviours. We hope that the Budget will communicate the message of discipline.”
The minister added: “The idea is to cajole the economy as we move to the next level, as we go ahead with the mantra that we are open for business. We are desirous to move the economy to upper middle-income status so the Budget will be an instrument of enactment towards attainment of that vision, and will carry on the following year and will keep building the way up.
“The idea is to balance the incentives to the market discipline, that’s what will come out to make sure that there are enough incentives and also enough regulatory character so that we stay within the straight and narrow.”
Confederation of Zimbabwe Industries president Mr Sifelani Jabangwe said industry anticipated fiscal support for manufacturers.
“One of the main issues that we expect is for the minister to provide a solution to help industry access foreign currency needed for our production processes,” he said.
“We thus expect a review of the allocations of foreign currency to allow those that have the currency to trade with those that need it. We hope that we can be able to get access to credit line in view of the nostro stabilisation facilities that have been spoken about.”
Zimbabwe National Chamber of Commerce chief executive Mr Christopher Mugaga said the best way forward was to de-dollarise the economy.
“What is now coming up is a local currency economy and we don’t expect a budget below $10 billion. This is a confirmation that we were no longer dollarised as we were.”
Mr Mugaga said Prof Ncube should consider establishing a foreign currency auction system.
“In Nigeria, they have a foreign currency system where the exchange rates are used for different purposes. For example, there is an exchange rate in Nigeria used for school fess payments, there is an exchange rate for those in industries and there is an exchange rate for the oil sector.
“So they have allocated the foreign currency market for different industries and if you are a player in critical industries you access the foreign currency at a different rate.”
Zimbabwe Miners Federation president Ms Henrietta Rushwaya called for incentives for artisanal miners who have contributed the bulk of gold output, which is set to reach a record 34 tonnes this year.
“We have made our submissions to the Ministry of Mines and Mining Development and these include proposed reduction of mining licences. Our top priority is formalisation of operations because some of the miners are not compliant because of excessive charges on licences.
“We also hope that the ZMF can be supported through the fiscal processes by allocating a certain amount of money from mineral revenue. This will help us to formalise and enhance operations of small scale miners so that we can increase production in line with the 100 tonne target for 2023.”
The Chamber of Mines will present a state of the mining sector report tomorrow, and that document will contain budgetary recommendations.