15 Nov 2019

The Zimbabwe Congress of Trade Unions (ZCTU) notes with disappointment the uninspiring National Budget Statement by the Minister of Finance and Economic Development, Professor Mthuli Ncube presented to Parliament on November 14, 2019 under the theme ‘Gearing for Higher Productivity, Growth and Job Creation’.
It is disrespectful for the Minister to begin the Budget Statement by glorifying the suffering ordinary Zimbabweans have endured in 2019. He quotes a statement attributed to Orson Whitney, a religious leader that says, “No pain that we suffer, no trial that we experience is wasted …, it ministers to our education and development…”. It is insensitive that you inflict pain on your people and find a way to justify it, especially for the working people of Zimbabwe who are generally incapacitated under the current austerity measures.
As has become the norm, the Minister paints a positive picture around his “Austerity for Prosperity” mantra, insisting that the implementation of fiscal consolidation reforms resulted in “…consistent monthly budget surpluses or savings reaching ZWL$1.4 billion between January and August 2019.” Similarly, he mentions that the current account delivered a positive balance of US$116.4 million in the first half of 2019, “…which all pointed to positive signs for restoring the much needed macro-fiscal stability, and elimination of the ‘twin deficit’.” The Budget Statement is up-beat about the fiscal consolidation and restoration of ‘tight monetary policy’ following the reintroduction of the Zimbabwe Dollar.
We wonder how a Government worth its salt can talk about budget surpluses in a country failing to provide basics like water and sanitation, proper health services, with slave wages, painful electricity outages of up to 18 hours a day, failing to pay its debts, create jobs and provide meaningful social protection cover? We ask which country the Honourable Minister is coming from or is talking about? If anything, the reality on the ground is different as the economy is in a tailspin with chronic high inflation and unprecedented erosion of incomes and prejudice of pensioners that is akin to the period of hyperinflation in 2007-2008. The re-introduction of the local currency against a context of a highly unstable economy and shortage of foreign currency reserves has spelt doom and gloom for ordinary folk. Even Government itself had indicated it would not re-introduce a local currency until the macroeconomic fundamentals were in place, but Nicodemously went against its own better judgement.
With the economy projected to decline by 6.5%, and recover by 3% in 2020 (which in itself is a mirage), there is no immediate respite for ordinary Zimbabweans, especially as the economy is clearly off the rails with chronic high inflation. The projected improved growth in 2020 is premised on a favourable rainfall season, improved macroeconomic stability through continued austerity; improved electricity supply through imports and other alternative sources of power; supportive tax and non-tax incentives; continued ease of doing business reforms and investment. We see these as medium to longer-term factors that may not immediately deliver better prospects in 2020.
We therefore wonder how the 2020 National Budget would mark the exit “…from austerity to growth stimulation and employment generation era through promotion of production oriented investment and productivity, without losing focus on fiscal responsibility” when the macroeconomic situation is characterized by chronic high inflation, continued shortages of foreign currency, and an emaciated populace. We may ask whether it is prudent to burn down the whole house in order to frighten the mouse away. It is therefore difficult to see how an economy in crisis can produce productivity and growth; jobs creation; competitiveness; a more sustainable and inclusive development and export diversification and import substitution all in 2020. Arguing that this growth and productivity thrust, supported by the reengagement process with the International Community “…will enable us to meet our Budget objectives,” is disingenuous.
While any tax relief measures are most welcome, we do observe that they cannot provide relief for incapacitated workers earning so little. Can the authorities not see that average minimum wages of ZWL600 are just enough for workers to have bread on their table, let alone other cost of living aspects such as food, transport, accommodation, education, health and social protection. It remains an indictment of this piecemeal approach in a chronically high inflation environment where prices are rated against the exchange rate, while wages are decoupled from it. This is the very reason workers are fighting for the rating of their wages against the exchange rate in order to achieve an equilibrium between prices and incomes.
Unless Minister Ncube climbs down from his ivory tower, there is no respite for Zimbabweans.
Japhet Moyo


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