2016 budget a damp squib - Opposition

HARARE - Zimbabwe’s 2016 National Budget is a “damp squib” that will make things “very tough” for public services,  and reflects the cluelessness and incompetence blighting the Zanu PF government, opposition parties said yesterday.

Presenting his budget to MPs on Thursday, Finance minister Patrick Chinamasa claimed there will be faster economic growth of 2,7 percent in 2016, buoyed by a growth in mining, tourism and construction. He however, admitted that serious downside risks remained.

He said the government is working on a slightly smaller $4 billion spending plan and hopes to raise $3,85 billion from taxes, with the $150 million budget deficit, which is equivalent to 1,1 percent of GDP, expected to be financed through domestic borrowing.

But the opposition said the “devastating impact” of austerity cuts was set to continue and the 2016 National Budget has not put in place a substantive programme to resuscitate the ailing economy.

Mavambo-Kusile-Dawn leader and former Finance minister Simba Makoni, said  the first thing to note is that although Chinamasa dropped a number of statements around revenue measures, there was no coherent  presentation of where the $3,8 billion is going to come from, which raises a serious question about how he is going to finance that expenditure.

“More interesting, Chinamasa himself and many economic analysts, permanent secretaries and Governor of the Reserve Bank of Zimbabwe, have all these years continued to highlight what they call no fiscal space, in common language, it just mean there is no money. 

“Even though they acknowledge that there is no money, they plan to increase expenditure. Last year, they started at $3,5 billion, they reduced it twice, this time they have gone above last year’s level which they failed to attain.

“We are also aware over the last two years, Zimra collections have declined substantially, so in line of that, how does that minister Chinamasa expect to raise the money to finance the budget? It gobbles the mind. “

Webber Chinyadza, secretary for Economic Affairs for Morgan Tsvangirai’s MDC, said the “poor budget statement does not indicate the willingness of the Zanu PF regime to create the promised 2,2 million jobs, neither does it have a definitive plan to ease the liquidity crunch that is debilitating nor a programme of action to reverse the deflationary conditions prevailing in the economy and hence no positive programmes to grow the aggregate demand in the country,”

“As a result, the current conditions of weakening business environment will continue unabated and any hope to grow the economy dashed.”

Settlement Chikwinya, opposition PDP economic affairs spokesperson, said Chinamasa’s budget was “unrealistic”  and “is once again reflective of the cluelessness, inability and incompetence on the part of the Zanu PF government in running this economy.”

“Instead of presenting a pro-poor budget to cushion Zimbabweans from the current harsh economic environment, the 2016 budget presented by Chinamasa makes sad reading as it will leave more Zimbabweans in worse economic, political and social situations than they were in 2015.

“In the absence of favourable conditions to attract Foreign Direct Investment (FDI) agreements, deindustrialisation in the country in 2016 is set to worsen while retrenchments will increase due to more company closures.”

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