Ncube's budget — A high-sounding nothing

HARARE - A high sounding nothing is how Zimbabweans described Finance minister Mthuli Ncube’s 2019 National Budget which proposed a raft of new taxes that will trigger fresh price hikes.

Ncube left many seething with anger when he introduced duty on basics, including cars, to be charged in the scarce foreign currency.

He also announced an increase in taxes on fuel, which will see fuel prices shooting up.

There was also concern about the rationale behind allocating the biggest chunk of the budget to security ministries at the expense of critical sectors such as health.

Ncube, a renowned economist, allocated $16 million to the Energy ministry and half-a- billion dollars to the Defence ministry which played a sterling role in birthing President Emmerson Mnangagwa’s so-called Second Republic.

The former banker and one of the five technocrats appointed by Mnangagwa to steady the economic ship allocated almost $700 million to the critical health sector which is in intensive care.

His biggest allotment went to the Primary and Secondary ministry which got over a billion dollars.

About $17,9 million went to the ministry of Information while the critical Prosecution Authority only received $8,1 million.

Freeman Chari, a Zimbabwe political activist based in the United States, said it was astounding that Ncube allocated $1,3 billion of the budget to security services while Energy, Mines, Tourism and ICT ministries got just $88 million combined.

“This is horrible,” he said.

Political analyst Maxwell Saungweme opined that the best defence for a country like Zimbabwe can only be attained if it respects the rule of law and invests in human development not necessarily military hardware and spying devices.

“I am happy with the budget as far as it allocated significant amounts to Health and Education ministries. I still do not like the high allocations to Home Affairs and Defence. We are not at war with anyone.

“The best defence and security for a nation is obtained by respecting and upholding human rights, investing in peace-building and not in military hardware and spying on citizens. I have also never heard where austerity leads to prosperity. The budget’s maxim, ‘Austerity for Prosperity’ looks a misnomer for me. At best austerity, leads to recovery or stabilisation, unless my understanding of the terms and economics has waned,” said Saungweme.

Former Finance minister Tendai Biti said the budget leaves the poor poorer, pushing prices further up when the salaries remain stagnant for those in employment.

“As for the budget itself, we truly are a cursed nation. What a load of confusion, contradictions and illegalities. The US$ is legal tender in Zimbabwe and therefore treating same as a foreign currency is both illegal and dangerous. It is an acceptance of devaluation of the bond yet.

“Revenues constitute 35 percent of Gross Domestic Product. So Zimbabweans are already overtaxed.

“Imposing duty in foreign currency when people earn bond notes, increasing duty on fuel and other goods is wrong and terrible economics. So prices will shoot but incomes have been eroded by devaluation and inflation,” said Biti on micro-blogging site Twitter. Ncube touched a raw nerve when he announced that excise duty on vehicle importation will be paid in foreign currency.

United Kingdom-based academic and researcher Alex Magaisa said the minister is a master of doublespeak.

“If the government insists on payment of duty in foreign currency, surely it follows and makes sense that you can sell and demand payment in foreign currency only? And surely the fact that government demands tax in foreign currency means it recognises this is perfectly acceptable?

“So we have one law which says the bond note and USD are equal. And now another law which says import duty on named goods, like cars, will only be in foreign currency? In other words, one law which says the currencies are the same and another which says, not quite”.

He also rapped Ncube for the increase of road fines from $30 to $700 saying such a “disproportionate” measure will only fuel corruption instead of deterring errant motorists.

“We all know government is looking for more revenue streams and road safety is important but an increase in the scale of fines from a maximum of $30 to $700 in a low-income society is grossly disproportionate. In reality, it opens opportunities for rent-seeking police officers,” said Magaisa.

“The propaganda ministry gets $17,9 million from the budget while the national prosecution authority gets a mere $8,1 million. A clear case of misplaced priorities. The government values propaganda more than the administration of justice,” said Magaisa.

Typically, Mnangagwa was full of praise for his ministers, saying the budget proposals will spur economic growth.

“The core message — austerity for prosperity — is a central component of our strategy to restructure, reform and rebuild, and I am confident that in years to come, this will be seen as a pivotal moment in Zimbabwe’s economic recovery,” said Mnangagwa.

Apparently, Mnangagwa and other senior government officials would also bear the brunt of Ncube’s austerity measures after a five percent salary cut but that is only for the “optics”, according to former Higher and Tertiary Education minister Jonathan Moyo.

Comments (2)

Bla bla bla - but today there is no fuel at the service stations. Govt says there is plenty of fuel. These govt half wits are at it again - soon the price will double in terms of mabondi notes comrades so keep your tank full at all times

ace mukadota - 24 November 2018

According to economic experts above the Minister achieve nothing, these are not true experts who only see the bad even though there are some good in it.Where they regard cars as basic good where drugs and cooking oil are in short supply. I am puzzled to understand their corrective answers to solve our economy out of the wood is to retain that 5% cut salary,use only USD as legal tender and seize the RTGS and ban the use of Bond,remove 2 cent per dollars tax and revert our Budget to 5 billion USD in stead of 8 billion now.

Voice - 24 November 2018

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