Biti silences critics

Finance minister Tendai Biti yesterday sought to placate his critics by announcing what he termed a “pro-poor” and “broad-based $4 billion budget”.

Biti, who has been at the receiving end of a barrage of criticism from farmers, industry and civil servants in the run-up to the budget, yesterday brandished goodies to his loudest critics.

The economy is expected to register a 9, 4% growth next year and inflation would remain under 5%.

Biti said he had initially prepared a $3,4 billion budget as indicated in the Budget Strategy Paper last month, but had to make adjustments to factor in $600 million to be realised from diamond sales following certification by the Kimberley Process.

“We intend to focus on attaining both growth that is pro-poor, broad-based across all sectors and a pattern of growth that moves us towards structural transformation,” he said.

“In this regard, we have an obligation to shift government resources from corrosive recurrent expenditure in favour of inclusive and pro-poor growth areas — a difficult task given the legacy issue of a high and disproportionate share of wages in overall Budget expenditures.”

But he is wary of the task at hand. “We have to live our motto: ‘We eat what we kill’, avoiding a sclerosis of unbudgeted expenditures, whether it be on account of wages, travel, support to ailing parastatals, among others.”

Biti sought to strike a chord with the most restive group, farmers, by increasing the agriculture allocation and proposed greater funding to revive work on stalled dam projects.

He provided more funding to rehabilitate irrigation facilities and to land-based extension services. He narrowed tax bands and revised the tax-free threshold from $225 to $250 a month, with effect from January next year.

The minister raised the portion of bonus exempted from taxation from $500 to $700 with effect from November this year.

“Given this inequality, and also in order to uphold the principle of equity and fairness, I propose to widen the income tax bands to begin at $250 and end at $10 000, above which income is taxed at the highest marginal tax rate of 45%, with effect from 1 January 2012,” he said.


Biti said the country had managed to secure $618 million in pledges from donors to support social services.

In a bid to reach out to the rural population, Biti allocated more resources to rural electrification, water and sanitation projects.

He said the government would sink boreholes at all rural schools to improve water supplies and cut the distance women travel to water sources.

He also allocated $3 million under the Women’s Development Fund to assist alleviate rural poverty.

The minister reached out to the youths by proposing a $20 million Jobs Fund whose primary purpose is to provide seed capital to Zimbabweans with ideas but no collateral. The programme should create jobs for unemployed youths.

He allocated $27 million for the rehabilitation of infrastructure at primary and secondary school levels, as well as $57,2 million for institutions of higher learning.

An additional $6,4 million was allocated towards housing development projects under the auspices of the Ministry of National Housing.

He urged the National Social Security Authority to invest in pro-poor projects especially housing.

He allocated $25 million to the Students Grant and Loan Scheme, which he said would be matched by an even bigger amount from cooperating banks.

In order to support vulnerable children’s access to education, Biti set aside $16 million under the Basic Education Assistance Module.

This support is set to benefit 160 000 secondary school pupils.

He said the agriculture sector was scheduled to register 11,6% growth next year with tobacco output topping 150 million kilogrammes, maize 1,8 metric tonnes and sugar production increasing from 259 000 metric tonnes to 400 000 metric tonnes.

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