By Victoria Ruzvidzo
“The term ‘development’ in international parlance encompasses the need and the means by which to provide better lives for people in poor countries. It includes not only economic growth, although that is crucial, but also human development — providing for health, nutrition, education, and a clean environment.”- Globalisation 101.
In both developed and developing economies national budgets and monetary policy statements are key instruments in fostering development.
This afternoon Finance Minister Mthuli Ncube presents the 2019 National Budget that should endeavour to satisfy, in part or in full, the definition of development above as the economy seeks to shrug off current constraints.
In simple terms, the National Budget largely plays a stabilisation and control function in an economy.
“Stabilisation function: The Budget helps to attain and maintain a desired level of economic performance in the county . . . Control function: Budgets are useful because they provide a basis for evaluating performance. Performance evaluation is carried out by comparing actual performance with planned or budgeted performance.”
The above definitions are quite relevant and critical at this juncture to contextualise the country’s expectations as Professor Ncube rises to the podium at Parliament Building this afternoon.
A lot is at stake in terms of Zimbabwe’s economic performance going forward.
The last person anyone would want to be today is Professor Ncube. He holds a powerful brief in Government, an envy of many, but on a day like today no one would want to trade places with him. He faces the daunting task of presenting his maiden budget at a time the nation is desperate for solutions to stabilise the economy.
He has very little room to manoeuvre and yet much is expected of him. No excuses!
A huge budget deficit, inadequate foreign currency in the market, a financially-starved domestic market, an eroding buying power, rising prices, and inadequate social welfare support are some of the challenges that every Zimbabwean, resident or non-resident, is hoping will be addressed.
They wish for a better year in 2019 and they all feel Professor Ncube will have in his briefcase a thesis of how this country will surmount challenges and produce better living standards for its citizenry, both individual and corporate.
Most people now have an idea that some challenges need more time to fix but today they will choose to ignore that fact and eagerly await the presentation of something that ensures a better tomorrow in the literal sense. It is no easy task for the minister. He would be the first to admit that his first three months in office have not been easy. But he appears to be made of sterner stuff.
He has done a bit, particularly on the revenue side via the two percent tax on all electronic transactions and current tax raids to ensure more funds flow into the fiscus. He has also been on an international campaign with Reserve Bank of Zimbabwe Governor Dr John Mangudya appealing for support from the International Monetary Fund and other partners in rebuilding the economy.
But the real test comes today when he must assure Zimbabweans that President Mnangagwa made the right decision in appointing him into office. The nation has invested its hopes in the contents of his briefcase and awaits this afternoon’s announcement with bated breath.
We do not, for a minute, doubt his capability, wisdom and potential to be equal to the task but the challenges at hand are by no means simple, straightforward or logical. It’s a whole complex ball of issues that need to be untangled and resolved for the nation to move forward.
The challenges that confront this economy are many and varied. We have spent acres of space highlighting these before but Professor Ncube should draw strength from the fact that they are surmountable. We do not expect the learned professor to succumb to the challenges that, instead, require him to be at his best.
They did not make him vice president of the African Development Bank for nothing, he did not operate a bank – Barbican Bank – out of mere gimmicking. He is usually in his element but we will not pretend that what lies before him is an easy task.
This economy is fraught with challenges that would have seen any weaker country placed under curatorship but this should not deceive anyone about the potential that lies in its belly. It’s a sleeping giant that can rise again.
Zimbabwe has the resources, both natural and human, required to grow the economy but what is required are policies and strategies that ensure the resources are exploited efficiently and effectively. This will resolve the challenges in this economy.
The past few weeks have certainly not been comfortable for most of us, with prices of basic commodities going northwards while many now demand foreign currency for some products and services. Pharmacies have emerged as the worst culprits.
Consumers look up to Government to effectively resolve the pricing madness. Professor Ncube will be expected to say something decisive in this instance and induce discipline in the economy.
There is need for realistic pricing formats and formulae. The suspension of Statutory Instrument 122 has brought some relief but there are other products and services that people need to access here but are currently priced out of reach of many.
Something needs to be done. Healthcare, as implied in the definition above, needs to be accessed by the poor if we are to talk of any form of development.
The foreign currency situation, as alluded to earlier, requires critical attention through boosting export performance. This means such sectors as agriculture, manufacturing and mining needs to be adequately funded and sustainable policies introduced so they can achieve their potential.
Value addition should remain as a key strategy on the dashboard to enhance export competitiveness while bringing in more foreign currency.
The import bill will also need to be watched although a temporary increase is expected following the suspension of SI122.
Zimbabwe’s balance of payments position has remained precarious over a long time but we believe the country has the wherewithal to improve the situation.
The painful if not scary issue of staff rationalisation in the public sector may need to be revisited and implemented as a strategy that could change things somewhat. Already about 94 percent of Government’s budget funds recurrent expenditure of which salaries constitute a huge part.
Of course, this requires careful handling.
The “Zimbabwe is Open for Business” mantra needs to be consolidated. We need to attract fresh capital to help drive the economy forward. Of course, we need to rid the economy of aspects that work in discord to this mantra such as corruption and bureaucratic bungling in processing projects.
All stakeholders need to play ball.
There is so much that is expected of Professor Ncube and we can only wish him all the best for this afternoon.
We are good to go!
In God I Trust!