Zimbabwe: Budget - Implementation Key for Economic Growth

22 November 2019

INDIGENOUS business stakeholders have bemoaned the recurrence of issues without implementation in the national budget, calling for action more than theory in the 2020 fiscal year.

Speaking at the ZNCC-ACCA post-budget meeting, Confederation of Zimbabwe Industries chief executive officer Sekai Kuvarika hinted that Government should be serious in implementing policies that propel ease of doing business and competitiveness for resident industries.

In his budget speech Finance and Economic Development Minister Professor Mthuli Ncube said "the thrust of creating a conducive environment for attracting investment, will be advanced in 2020 with improved attention towards ease of doing business and operationalisation of the one-stop-shop investment centre to reduce the bureaucratic process of registering, licensing, and facilitating investments and operations of companies."

But the CZI CEO told the delegates that Government should consider executing the so-called reforms moving away from policies that discourage good business practices.

"My sources of discomfort in the budget have always been around policy assumptions where the budget is anchored around certain policy intentions which to me should guarantee some of the deliveries in terms of forecast revenue and forecast on how budget itself is going to perform.

"We are currently doing an analysis on the past five budgets, just to look at the things that have appeared in the budget statement continuously and actually not happening," Mrs Kuvarika said.

She indicated that implementation of some critical changes should be done to stimulate confidence in the economy moving away from rhetoric all over again.

She hinted on how an environment with coherent policy was a vital cog in the realisation of the budget objectives and a competitive economy, something which could easily be turned into contrast if an environment was characterised by weak policy coordination, calling on authorities to avoid dragging feet towards reforms like critical turnaround of State-owned enterprises and adjustment of policies to those that stimulate economic performance.

"There is always a statement of intent especially about State-owned enterprises and public sector reforms, but little then happens on the ground. Year in year out those reforms are actually not achieved, and now what guarantee do we have that those reforms on the budget will kick in in the 2020 budget.

"My view is that if we do not deal with policy coordination and policy harmonisation to align various economic sectors, the budget may not deliver because it is assuming that there is going to be a positive reinforcing environment when it is opposite on the ground.

"The second one is on the ease of doing business, and provision of a competitive business environment, because if we create a stable macroeconomic environment and not have a competitive business regulatory environment, the businesses are still going to be constrained," she said.

Government has embarked on the second round of ease of doing business reforms, targeting 16 areas including improvements in paying taxes, obtaining construction permits, starting a business, ease of doing transport business, clearance of imports and exports among other areas as well as establishment of Zimbabwe Investment and Development Agency (Zida).

On the other hand Agribank chief strategist Mr Joseph Mverecha lauded the Finance Minister for directing a significant chunk of funding towards the productive sectors of agriculture as it is the mainstay of the economy.

"I think one of the things the Minister of Finance did, which is quite visible, is the allocation of resources towards agriculture, because the economy is agro-based. Allocation of agriculture translates to 14 - 15 percent of the budget which is somewhere close to the Abuja declaration, so there is a recognition that agriculture together with mining will underpin the recovery of the economy.

"It looks like there is bigger effort to ensure food security from production point of view. I think the minister made an effort to mitigate drought instances as he allocated about $5,22 million for animal disease control in the livestock sub sector and $422 million for irrigation development, therefore we expect in that context the completion of dams like Gwayi Shangani and Marovanyati," said Mr Mverecha.

Several other sectors called for a rise in employees' disposable income to improve aggregate demand across sectors in 2020, a departure from this year's position where a number of firms witnessed a decline in volumes uptake stemming from the unavailability of sufficient income.

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