Budget with a difference:
. . . Prof Mthuli walks the tightrope
FINANCE and Economic Development Minister Professor Mthuli Ncube, who literally carries the weight of citizens’ expectations when he presents the 2019 National Budget statement this Thursday, says the budget will strengthen beneficiation in the mining sector and boost funding for agriculture.
Further, the budget is also expected to speak to the retooling of industry to boost output at competitive costs while creating more jobs for the country’s citizenry.
The minister also said the 2019 budget will seek to capacitate small and medium enterprises (SMEs) and youths, though increasing access to finance.
Critically, Prof Ncube told The Sunday Mail Business last week that contributors during nationwide budget consultations proposed a deviation from previous statements that sought to merely allocate funds without following up on their use and impact in society.
“So much came out of the budget consultations. Of course, the various ministries are always asking for more money; that is understandable, that is what they should do,” said Prof Ncube.
“But of course, it is important that every dollar that is spent is followed through in terms of impact. It is one thing to request for money, which is really the input, but it is quite another to really follow the impact of that in terms of development.
“So this came out strongly to say, going forward, this is something that we should look out for. Quite clearly, we want to strengthen the financing for agriculture, we want to strengthen the beneficiation process in the mining sector.”
With the national drive now towards achieving ‘Vision 2030’, which seeks to create an upper middle income economy, establishing decent jobs for citizens has become top priority for Government.
President Mnangagwa has indicated that he wants ordinary citizens to earn an average of $3 500 per year by 2030.
To achieve the target, Government wants to support the manufacturing sector through the law and funding where possible, to ensure they ramp up production.
Said Prof Ncube: “We want to increase our facilities for retooling in industry to ensure that industry can be competitive. We also want to make sure that we improve access to finance for the SME sector and strengthen the EmpowerBank’s capacity.
“A lot of things came out of the budget consultations and I think this budget will go a long way in contributing towards strengthening the economy by dealing with those issues that MPs and Senators raised.”
Prof Ncube said with the right vision, the country can be moved to the “next level, which is an upper middle income by 2030”.
Last year, former Finance Minister Patrick Chinamasa presented a $5,1 billion budget and indications are that not much will change given the cost cutting measures being implemented.
Govt keen on achieving Vision 2030
Prof Ncube said everyone in Government is committed to achieving the vision. Already, Government has unveiled the Transitional Stabilisation Programme (TSP), which seeks to unpack Vision 2030 and provide an implementation plan.
Prof Ncube said reforms in the TSP, which target cutting Government expenditure and reforming parastatals, among others, have been well accepted both locally and globally.
International finance institutions such as the World Bank, International Monetary Fund (IMF), the African Development Bank (AfDB) and the Paris Club, are understood to have been impressed by the TSP, especially on aspects to do with Government expenditure, parastatal reforms and debt clearance.
In terms of parastatal reforms, Government announced last week that it has targeted 41 entities for privatisation, departmentalisation and listing on the Zimbabwe Stock Exchange.
Other firms will be commercialised and merged while four will be ‘buried’.
Thirteen firms will be privatised while 12 are set for ZSE listing.
Firms lined-up for privatisation include the Infrastructure Development Bank of Zimbabwe (IDBZ), Zupco, Agribank and some subsidiaries of the Industrial Development Corporation (IDC). Petrotrade, Willowvale Motor Industries, Chemplex Corporation and Deven Engineering are set for ZSE listing.
Thirteen firms, including the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), the Broadcasting Authority of Zimbabwe (BAZ), Powertel, ZARNet, Africom and the Boxing and Wrestling Boards are earmarked for mergers.
The Competition and Tariff Commission (CTC) is set to merge with the National Competitiveness Commission (NCC), while the Zimbabwe Investment Authority (ZIA), Special Economic Zones Authority (SEZA) and the Joint Ventures Unit (JVU) will also be bundled together.
ZimTrade, the country’s premier trade promotion body, which was expected to be merged with ZIA, JVU and SEZA, has survived due to changed circumstances.
Government also said the National Glass Industries, Zimglass, Kingstons Limited and tractor firm, Motira, will be guillotined.
New Ziana, the National Indigenisation and Economic Empowerment Board (NIEEB), Board of Censors and the Lotteries and Gaming Board will all be adopted by their respective line ministries.
Seventeen subsidiaries of the Zimbabwe Mining Development Corporation (ZMDC), the Grain Marketing Board (GMB) and the Civil Aviation Authority of Zimbabwe (CAAZ) will be unbundled to separate their regulatory and commercial functions.
Government wants to restructure parastatals to curb further losses as the bulk of them lack serious leadership.