Zimbabwe proposes budget aimed at reviving bleak economy

Evarado Alatorre
Diciembre 8, 2017

Presenting his 2018 National Budget proposals, Minister Chinamasa said bonuses were part of civil servants' salaries, hence they should be paid.

In a budget statement tabled before parliament on Thursday, Finance Minister Patrick Chinamasa said the 2018 budget "will provide resources amounting to US$132.2 million in support of the 2018 Harmonised Elections budget".

President Emmerson Mnangagwa has blocked the blowing up of over $219 million on expensive cars by ministers, chiefs and MPs.

The Indigenisation and Economic Empowerment Act (IEEA), which aimed to place 51% of companies into the hands of black Zimbabweans, was brought in by Mr Mugabe in 2009.

Former Reserve Bank of Zimbabwe governor Gideon Gono described the national budget as "comprehensive under the circumstances, practical, bold, courageous, forward-looking, investment stimulating, confidence boosting and painfully sweet".

During his budget presentation, Chinamasa said the cleansing process targeting unlawful and illegitimate transactions, which includes money laundering, externalisation of foreign currency and underground foreign exchange deals would be severely dealt with.

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But the lawmakers roared in disapproval when the finance minister allocated $420 million to the defense ministry and just $408 million to an ailing health sector.

"From the Special Economic Zones (SEZ) point of view, we are ready to fly as soon as the twin issues of the chief executive officer and the secretariat have been attended to", said Gono, who is the chairman of the SEZ.

Minister Chinamasa said the only way to effectively increase the country's revenue base was for Government to grow the economy.

The $5,7 billion budget is $1,6 billion more than last year's $4,1 billion.

The wage bill for 2018 is set at $3,3 billion, representing 57 percent of the total budget - down from 73 percent in 2017. "The total outstanding request for condition of service vehicles is now close to $140 million, which the economy in its state can not afford", he said.

The minister acknowledged the inflationary pressure endemic in the economy pointing out that inflation was being driven by the discounts on real time gross settlement system, otherwise known as the RTGS.

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