AS the nation awaits the 2020 national budget presentation this Thursday, economists have urged Finance minister Mthuli Ncube to be realistic and present a people oriented budget which would aid economic growth by boosting the productive sector.
Speaking to Zim Morning Post during budget previews, economists urged Ncube to allocate more money to the productive sectors in order to generate sustainable revenue for government.
Godfrey Kanyenze – an economic analyst – said the most important thing was to put in place measures that would allow for the stabilisation of the currency, consequently curbing inflation.
“Mthuli has to put in a fiscal policy that will stabilise the exchange rate by making sure there are no loopholes that will give room to exploitation by cartels with deep pockets,” Kanyenze said.
“A budget that will prioritise defence and security issues as if we are at war is not people oriented. Mthuli has to prioritise fundamental issues,” he added.
Kanyenze reiterated the need to draft a budget that would solve the current crises in the country, among them energy and water.
“We are expecting a budget that will address livelihood issues, among them primary healthcare, education, and employment creation.”
He further said Mthuli was supposed to address the issue of transparency and accountability in the disbursing of funds in order to reduce the abuse of funds and corruption in the country.
Kanyenze gave emphasis to consensus building on important national policies.
Another economist, Gift Mugano, implored the minister to address structural challenges that currently bedevil the country’s productive sectors.
“Our challenges are centred on the lack of a vibrant production sector, and our government has ignored the call to resuscitate industries. As a result, it has resorted to taxing the poor,” Mugano said.
He said raising revenue by taxing the poor was not sustainable and would continue destroying the economy instead of growing it.
“Mthuli should stop the 2% tax and give tax incentives to companies that are producing, including a tax exemption to investors who want to do business in the productive sector.
“This was done in Nigeria, resulting in a 93% growth rate in companies that were producing raw materials,” Mugano added.
Recently, the Finance ministry predicted that power generation was going to increase as the country expected high volumes of rain during the 2020 agricultural season.
Mugano, however, was sceptic and said the country needed three good rain seasons in order to fill Kariba Dam, adding that sourcing forex for power generation was still key.
“What we are expecting is setting aside foreign currency for power generation in our industries and more money for fuel to secure production in industries and the farms,” Mugano said.
He also advised Ncube to focus on import substitution and not pour too much money into the security sectors.
Mugano said the Transitional Adjustment Programme could be effective if government stopped the flip flopping of policies and adhered to agreed principles.
“Quasi fiscal policies have destroyed confidence in our businesses. We, therefore, need better ways to monitor what we have put in place because policies need consistency and sustainability,” Mugano added.
Busisa Moyo, a member of the Presidential Advisory Council, said the private sector was expecting an increase in output rather than consumption.
“Our focus as private sector is expanding production output. This includes a fourth industrial revolution technique deployment to increase output in agriculture, mining and manufacturing. We would want to understand how the budget will address this,’’ Moyo said.
He emphasised on the need to have a stable macroeconomic environment and reversing the trade account deficit.
Moyo added that output growth was the only viable solution towards stabilising the exchange rate.
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