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Mthuli to Present 2023 Budget Before 2022 Closes

By Shingirai Vambe

Varying expectations by businesses, political parties and key stakeholders will be reconciled on the 24th of November 2022 when the Minister of Finance and Economic Development Professor Mthuli Ncube presents Zimbabwe’s 2023 budget, which among several highlights would be dealing with a highly tentative plebiscite.

Following robust technical engagements by parliament and the executive regarding financing of their respective ministries during the pre-budget seminar, Ncube advised that he will present the budget before year end. However, the proposed bids by legislators, ministers and several key stakeholders exceeded the country’s annual revenue by ZWL $5 trillion to reach over ZWL $9 trillion.

The majority of government ministries did not utilize more than 50% of their allocated funds for 2022.
Even though the Zimbabwe Revenue Authority (ZIMRA) is collecting tax revenue in United States Dollars, the pre-budget seminar never made any intention or commitment to allocate this foreign currency to critical ministries like Health or Agriculture or even salaries.

Economic analyst, Gift Mugano told Post On Sunday that the ignorance by Prof Mthuli to account for US dollars being collected daily from the economy leaves a lot to be desired as more misappropriations continue to surface through parliament and the AG’s office.

Line ministries presented their critical bids and proposals for a dual budget in both local and foreign currency were made last year on the basis that the economy had self-dollarized, but the treasury chief declined and instead continue to push for the use of local currency which is however scarce due to inflation currently at 837.53 percent. Prices of goods and services have gone up even in US dollars owing to the global market forces such as the ongoing Russia-Ukraine war.

Several ministries failed to meet their annual targets due to late disbursements and inadequate funding by treasury. This however in stark contrast with the Auditor General’s (AG) report which revealed that a number of ministries and government departments failed to produce their financials upon request by the A.G’s office.

In her report, the AG, Mrs. Mildred Chiri reports that there was gross abuse of funds by government, through over spending without following due process including failure to account for US $10 Billion from the previous financial year.

Though it received a backlash from stakeholders during the pre-budget seminar in the capital city Harare, the Ministry of Information, Media and Broadcasting Services proposed for more funding to complete the digitization program, regardless of the AG’s report that it had failed to account for over US $60 million.

Hwange Legislator, Daniel Molekeli among other legislators argued that there was no valid reason to fund the ministry because of the various dynamics happening in the Information Communication Technology like social media which has changed the face of mainstream media, while the state broadcaster was covering only one political party when being funded by treasury through tax payers’ money.

In one way or the other, ministries have flouted financial and procurement processes, making it difficult for accountability and transparency. Parliament and the AG’s Office continue to suffer huge setbacks in execution of their operations due to late disbursement and inadequate funding from treasury.

Now and again, legislators have been denied access to accommodation due to non-payment, unavailability of fuel coupons as well as other sundries to ensure operations. The Permanent secretary in the ministry of finance, George Guvamatanga assured delegates who attended the Pre-Budget Seminar that it was now a thing of the past as government had already started making payments to its line ministries.

Guvamatanga said the Basic Education Assistance Module (BEAM) facility for the education sector had already started rolling out five weeks before the seminar, while school fees for teachers’ children is now being deposited through the Salary Service Bureau (SSB). Education in Zimbabwe is in a dire situation with some children in Matebeleland reportedly collapsing due to hunger and school authorities sending away children, including those under BEAM for non-payment. Government policy states that no child must be excluded from class due to nonpayment of fees.

The Vice President who is also the minister of health, retired General Constantino G. Chiwenga reported the strides being made in the health sector and applauded the second republic of prioritizing health, building hospitals and clinics across the country and pledged new equipment would be supplied including already bought Ambulances for few hospitals.

The Committee on Health and Child care Chairperson, Ruth Labode bemoaned the current state of health service delivery in the country where even paracetamol is in short supply.

A call was made by the women’s caucus and the Portfolio Committee on Health that, Ekusiline Hospital, in Bulawayo, be opened as a cancer referral hospital. Chairperson of the Budget and Finance Committee, Hon Matthew Nyashanu said there was Lack of critical equipment and services for maternity and general wards. Nyashanu further lamented the lack of proper shelter for hospital staff and rural people having to travel more than 20-30 kilometers to access basic healthcare and suggested the introduction of more mobile clinics

The Minister of Energy and Power Development, Mr. Soda Zhemu announced that government had since opened its doors for private players to invest into renewable energy and deal with power challenges emanating from continuous breakdowns at the Hwange Power Station. Zhemu explained that it was rather unfortunate that some of those who are licensed haven’t started doing anything at all, while others are contributing almost 100MW into the national grid.

He added, due to climatic conditions Kariba dam water level have gone down and contribute to the shortage which maybe cushioned by private players and or Hwange Power Station if 7 and 8 is complete as per the target.

The Committee notes, more skilled workers leaving the country because of poor salaries and continuous economic meltdown.

The Ministry of Women’s Affairs, Small to Medium Enterprises took the finance minister to task saying an increase in taxation where close to 75% of the economy is informal can only lead to a blanket increase in prices of goods and services in order to cover for the amount withheld for non-compliant suppliers.

Stakeholders proposed that the Minister maintains “withholding tax” at 10% and prioritize supporting ZIMRA to automate tax compliance processes and reduce human interface to deal with corruption and deliberate bottlenecks in the system. Further proposals were on reductions of Presumptive tax from US$ 30 per month to US$ 50 per quarter including the adequate funding of Zimbabwe Women’s Microfinance Bank (ZWMB) so that SMEs and women can be fully capacitated.

A proposal was made, to do away with other institutions operating the same way the women’s bank is, such as SMEDCO.

Norton Legislator Themba Mliswa alleged intentional silence and ignorance to the fact that the Mining and construction industry is racking in millions of US dollars monthly but is not included in the 2023 budget, while Defence Minister, Oppah Muchinguri could not share more details around the various companies and income generating projects which the Army is involved in locally. Legislators were left unsettled as crime rate continues to rise including robberies being perpetrated by members of the security forces.

Muchinguri said Zimbabwe National Army was feeding on sadza and beans at times without cooking oil, while staying in dilapidated structures in the Barracks. Rushinga legislator Tendai Nyabani and Buhera South, Joseph Chinotimba  expressed disappointment and said, “you use the army to protect you, but you can’t take care of them”.

Some legislators were left with questions, how the country’s resources are being used and what treasury was prioritizing. Valid points and proposals were made but likely to end in those 4 walls of the Conference Centre as in some instances one would notice that some ministers and legislators were playing politics at the expense of the country.

In his closing remarks, Prof Ncube however submitted that the economy is growing, albeit at a slower rate when compared to 2021, on account of global disturbances and other adverse domestic factors.

“GDP growth for 2022 has been revised downwards from 5.5% during the 2022 budget to 4.6% during the mid-term review. Further reviews are still on-going as we undertake these stakeholder consultations. Higher growth is expected from mining, accommodation and construction sectors while the agriculture sector is expected to contract,” said Professor Ncube.