Once again it is that time of the year when Finance Minister Tendai Biti will be under the spotlight as he delivers his Mid-Term Fiscal Policy Statement.
The question on everyone's mind right now is what does the minister have in store for the nation and the economy?
Zimbabwe expects the fiscal policy to come up with comprehensive economic programmes aimed at addressing economic production, food security, poverty and unemployment. Ever since the inception of the Global Political Agreement in September 2008, the economy has managed to address these fundamentals at different rates and one would hope that solutions continue to trickle in.
This instalment will focus on some of the issues that have been raised in the build-up to the presentation scheduled for July 12, 2012.
On the production side, the country obviously needs to focus on policy consistency. Zimbabwe urgently requires a clear, predictable policy framework that supports businesses in terms of tariffs.
Unsustainable tariffs have contributed to dumping in the manner that is prevailing in the motor industry, for example, where South African vehicles are sold at cheaper prices in Zimbabwe than at source, a situation that threatens to cripple local assembly plants.
In an urgent macro-economic taskforce meeting organised by the National Economic Consultative Forum it was suggested that the local motor industry would benefit from a Motor Industry Development Policy similar to that adopted in South Africa in 1995, which led to a boom in the country's motor industry.
The local motor industry suggested that Government should make it mandatory that all vehicles to be imported into Zimbabwe be completely knocked down units instead of completely built units. Such a policy will not only benefit the motor industry but can be adopted and customised for different sectors as it encourages value addition. For the motor industry such as policy has the capability of creating up to 40 000 jobs up from the current paltry 13 000.
Zimbabweans, and particularly Government institutions and departments, need to enforce local procurement laws.
Quest Motor Corporation, a local vehicle assembly company assembling the Chery Tiggo, the JMC truck and the Foton trucks, has engaged the State Procurement Board to be included on the list of preferred suppliers of vehicles to Government. One hopes to see senior Government officials driving Cherys in the near future.
Food security is one of Government's main priorities. Minister Biti was quoted in the media around January this year as saying Zimbabwe will not carry a begging bowl as it has enough grain to feed its people. He also said despite the late rains last year, there had not been much crop loss as feared by many.
Grain Marketing Board general manager Mr Albert Mandizha, however, raised the issue of waning farmers' confidence when it comes to selling their crop to the
Strategic Grain Reserve in the forthcoming season since there are still outstanding amounts that they are owed from last season. This, he says, has the potential of compromising the building up of stock in the Strategic Grain Reserve.
The fiscal policy is also expected to address the timely disbursement of inputs to farmers to avoid the last- minute rush that has affected farmer's planning process in the past.
The continued failure by Government to pay back monies owed to several companies, particularly in mining, has led to scepticism among investors. This also has the effect of reducing jobs in a market that had begun to positively open up. Government needs to be clear whether these monies shall be paid. While it is generally agreed that the fiscus may not be able to offset these amounts as quickly as desired, central bank needs to outline clear payment terms for the monies owed to companies.
The budget review also needs to look at the continued shut down of Shabanie Mine as this has a negative effect on the country's water and sanitation programmes and infrastructural development as a whole.
Turnall is presently importing fibre worth US$12 million when the money could be utilised locally.
We are seeing an influx of foreign retailers who have realised that the local market is lucrative to trade in. While this might be a positive sign of the growth of the economy, it is important that we do not turn Zimbabwe into one giant supermarket for foreign products.
Government should work with local business associations to establish a content quota for the new foreign retailers that are entering the Zimbabwean market. This quota should be able to increase the shop floor space allocated to local brands and encourage them to compete fairly with imports.