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The government has for the first time acknowledged that the Zimbabwe dollar has no value, after acting Finance Minister Patrick Chinamasa, on Thursday detailed the country's budget proposal in the US greenback.
The proposal, which will officially pave the way for the disappearance of the local currency in trading, will make dealing in multiple currencies legal for all Zimbabweans, in theory to curb hyperinflation. The inflation rate is the highest in the world and has seen the local dollar crumble to its current worthless position. The economy has for weeks been informally 'dollarised' with almost all sectors trading in US dollars, and the new budget proposal has made the move official.
Analysts from South Africa's Standard Bank had said the official dollarisation of the Zimbabwean economy would be confirmed if taxes and duties were charged in forex - an action that has now been drafted in the new budget proposal.
SW Radio Africa's Harare correspondent, Simon Muchemwa, explained on Thursday that US$1.9 billion has been proposed for ministerial allocation, with the majority of the money being set aside for the education and health ministries. Muchemwa said that while not specifically stated, salaries and wages are included in the funds allocation. However, it's understood that civil servants will still not be paid the foreign cash they have demanded, and it's widely believed payment will remain in the worthless dollar. Reports suggest they may get a small forex 'allowance.'
Muchemwa detailed the key points of the proposal, including the move that tax, VAT and excise duty would be charged in forex. Muchemwa also explained that the government is "trying to get as much money in as possible" by extending its tax branch, with the budget proposing that "high earning accounts in the informal trading sector" will be hit with 40% tax charges, although it is yet unclear how this will come into effect.
The budget speech was reportedly met with laughs and jeers from the MDC parliamentarians and the party has yet to submit its own ideas for the proposal. The mere fact that the budget was drafted without the inclusion of the MDC has once again emphasised the hollow nature of the unity deal that will somehow be implemented in the coming weeks,
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Where on earth is Mugabe going to find US$1.9b to fund this budget? Even with US$200m from donors it still leaves a huge amount that the government simply does not have or is likely to have.
Katz u asked where Old Bob will get the Money!!! he will just put his hand out with his begging bowl and it will drop like manner from heaven!!!!!
AMERICAN DOLLARS now talks to a regime that often despises America. We knew all along that Zanu PF when they spread hate they will be lining their pockets with AMERICAN Dollars. Now what happens to the poor rural folks who can not access USD?
Thank you for this privilege to voice my opinion.For a month I have been writing out the solution.No one is Listening:S.A.needs to call for a new election in 90 days.Bring in troops from all 53 African States for 180 days to keep the peace.The winner shall govern.The looser can stay or leave.God Bless Africa and America. Our Pres.,Oboma loves Zim.Too. Oweij Liebo U.S.A.
This is funny, it looks like zanu(pf) is running away from its shadow. The national currency ghost is going to haunt them for ever. I think they are now printing their own US dollars like what Joseph Chinotimba once said. " Hatina basa nemaUS dollar avo tinopirinta edu." Thats not a joke he said that. I also have relatives in the rural areas but don't worry about the rural people, there are the reason why zanu(pf) is still holding on to power. Thats a good wake up call for them. Vachadya zvavakapfumbata muchibhakera chezanu(pf). I just feel sorry for small kids whose future is being destroyed whilst their parents are doing nothing about it. We are going to have generation of illiterate people in the near future.
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