Biti upbeat ahead of National Budget

FINANCE MINISTER Tendai Biti says he will today announce a demand-driven national budget that will quicken economic growth at a time when the country’s key economic sectors — agriculture and manufacturing — continue to decline.

Report by Bernard Mpofu Chief Business Reporter

Biti told NewsDay yesterday that Treasury had carried out wide consultations across the country to craft a national Budget widely expected to stimulate economic growth. He, however, warned that the success of new measures expected to be announced in the fiscal plan hinged on the political will of leaders of the inclusive government formed in 2009.

Already, the government has cut economic growth projections to 4% from 5,6% due to the underperformance of diamond revenue and the dire state of agriculture.

The minister is on record announcing that revenues have stagnated, a development that has taken Treasury to regional peers seeking budgetary support.

With no long term finance from multilateral lenders, it has become apparent that State coffers cannot be relied on to resuscitate the country’s infrastructure.

“The budget will provide leadership for this economy,” Biti said.

“It will identify problems and define plans for such problems.

“The ball is now in the court of implementers and politicians for it to succeed. We, as Treasury, have defined a clear roadmap to move this economy. The budget will be demand-driven.

“We have carried out 333 consultative meetings across the country and received 220 written submissions. It’s a budget that will meet demands of this economy.”

Analysts warn that Biti’s dilemma would be striking a balance between populist pro-poor measures characterised by low taxes on individuals and taking heed of the International Monetary Fund (IMF) prescription on austerity measures.

The minister is already facing pressure from Zanu PF politicians who accuse him of failing to “fully support” agriculture in a capital-starved economy. Industrialists on the other hand, are clamouring for a stimulus package after capacity utilisation for the manufacturing sector this year plunged to 44,2% from 57,2% year-on-year.

But fiscal space is already constrained due to a huge debt now representing 118% of the gross domestic product and a cash budgeting system.

The Southern African Parliamentary Support Trust, in a pre-budget statement, however, said not much was expected from the budget given the country’s “fundamental constraints to growth.”

“Skewed priorities are evident elsewhere.

“Agriculture has traditionally been the mainstay of the economy — providing livelihoods for over 75% of the population, and sustaining industry with raw materials and demand for services and goods,” reads the statement in part.

Yet, despite the decline of this sector, we continue to see a greater proportion of expenditure spent on defence.

“However, even if the budget were to realign spending priorities, it would not be enough to ensure sustainable growth.”

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6 Responses to Biti upbeat ahead of National Budget

  1. dube s November 15, 2012 at 9:56 am #

    l used to like the guy during his first days in parliament but now biti is just one of those l no longer have respect for him even if l meet him on the road l dont think l can say hie to him he has let us down a young man of his age he has the potential of being the one to come after the man who has failed to control his zip as jona would say.mbut funny enough these guys l really dont know wats up with them they cant just deliver which makes one to think that zanu is far much better than them even though there are others who are better

  2. Mutongi Gava November 15, 2012 at 11:46 am #

    Dube S, you may not trust Biti and company but to say that zanu is better is in itself a betrayal, everyone in the world knows that zanu means suffering of the people either way, if they are not killing innocent civillians, they will be busy stealing or arresting political opponents on trumped up charges, if this is your better, then shame on you or you are one of them, a wolf in a sheep skin.

    • Concerned November 15, 2012 at 2:42 pm #

      Dube S,I don`t really think your comment on Biti is spot on,how do you expect Biti to deliver when in actual fact the revenue from our diamond sales is being looted by Minister Mpofu and his Zanu Pf colleagues?How do you expect him to deliver when in actual fact they is nothing in his coffers?Thanks to Mutongi Gava for reminding the ignorant Dube S!

  3. Gutter Poet November 15, 2012 at 9:08 pm #

    @Concerned ..of course diamonds are being looted but they are not the only revenue stream available to government. If one were to ask with a straight face what is it that Biti does at the ministry besides endless talk about looting of the diamonds to the detriment of everything else.? I am inclined to agree with Dube S, this is one guy who showed so much promise but has turned out to be all hot air like one Johnathan Moyo; big on talk, minute small on deliverables. Its like young Chamisa’s Kuwadzana library which is still to be completed, a mirage. Unlike their ZANU colleagues who are big thieves everyway you look at them at least they try to let their words match their actions..I would like to challenge the minister to spell out in this paper or on any forum what it is he thinks he has achieved since going into that office, I mean like an honest personal appraisal!

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