The Sunday News
PRESENTING the 2019 National Budget proposals, Finance and Economic Development Minister Professor Mthuli Ncube quoted the late John Stuart Mill, a British philosopher, political economist, and civil servant who was one of the most influential thinkers in the history of liberalism who contributed widely to social theory, political theory, and political economy.
“I have learned to seek my happiness by limiting my desires, rather than in attempting to satisfy them.” It is a famous quote that speaks to priorities and learning to live within one’s means. It aptly sums up the theme of the budget presented by the Finance Minister which is “Austerity for Prosperity”. The budget seeks to stabilise the economy and build a solid foundation for a prosperous economy in line with Vision 2030.
Some of the highlights of the budget are; private vehicles import duty will now be paid in forex, civil servants bonus will be paid before year-end but based on basic salaries only, youth officers will be retired by year-end, there will be a five percent salary cut for Government senior officers right up to the Presidium. There will be biometric registration for all civil servants from 1 January 2019 to flush out ghost workers.
There will be resuscitation of Ziscosteel and the Cold Storage Company, companies collecting VAT in forex will remit the same in forex. The minister raised excise duty on petrol, paraffin and diesel by up to 7 cents per litre to reduce arbitrage opportunities by foreigners taking advantage of local currency disparities, and further exemptions will be announced regarding the two percent levy on electronic money transfers. Directors and shareholders will be jointly and severally liable for tax debts of voluntarily wound-up companies.
On parastatal reforms, there will be partial and full privatisation of a number of state-owned companies. There will be no further acquisitions of Non-Performing Loans by the Zimbabwe Asset Management Company. There will be a reduction of foreign missions/embassies and the multi-currency basket remains with the US dollar as the reference currency.
Key stakeholders have hailed measures contained in budget proposals, but spelt the need for their full implementation.
Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said the Budget Statement is targeting to deal with fiscal and current account deficits. The twin deficits have been major sources of overall economic vulnerabilities, including inflation, sharp rise in indebtedness, accumulation of arrears and foreign currency shortages.
“The issues we need to deal with are four-prong to ensure that we achieve Vision 2030. First we need to cut the fiscal deficit, second we need to work on production, third we need to work on exports development and finally we need to work on foreign finance.
“Are these the issues contained in the Budget? Certainly. The Finance Minister was speaking about fiscal consolidation, austerity measures, export development, production and re-engagement and access to foreign finance. Therefore what is left is to walk the talk and it’s not a Reserve Bank of Zimbabwe issue alone, it’s a national issue and we implement measures through other people,” said Dr Mangudya.
