Biti delivers sweetener

By The NewsDay | Nov. 16, 2012 | 3 Min read

FINANCE minister Tendai Biti yesterday presented a $3,8 billion National Budget, with a marginal salary increment for civil servants and relief to bank depositors.

REPORT BY BERNARD MPOFU CHIEF BUSINESS REPORTER

Civil servants who had been pressing government for a salary increment since soon after receiving an adjustment in June will see their salaries going up by 5,5% in January.

The salary adjustment was part of a cocktail of pro-poor measures which include the non-taxation of incentives paid to teachers by school development associations to augment the meagre government increment proposed by Biti.

He also announced a sweetener ahead of the festive season, raising the tax-free bonus threshold to $1 000.

Independent statistics show that most Zimbabweans earn an average of $200 monthly.

Biti also announced that State-owned banking group CBZ Holdings had set aside $10 million in mortgage finance for first-time home owners in the public service.

He further proposed an increase in excise duty on alcohol and tobacco in his quest to widen the revenue base.

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The 2013 National Budget could be a respite for the banking public after Biti proposed a directive ordering banks not to levy accounts with a balance of less than $800.

“Following extensive consultations with the various stakeholders, no bank charges should be levied on deposits of up to a maximum of US$800,” he said.

“Any term deposit of US$1 000 and above held over a period of at least 30 days and above should attract an interest of at least 4% per annum.”

The application of positive deposit rates, according to the minister, would be irrespective of the currency.

In a bid to promote the use of plastic money, the minister directed all banks to issue mandatory debit cards to both savings and current account holders.

Biti, however, warned that the forthcoming elections, which are expected to mark an end to the coalition administration, could derail several measures proposed in the fiscal plan.

He said he had set aside funds for the constitution referendum and harmonised polls.

“The 2013 outlook also looks bleak – blighted by a miscellany of factors that include a deeper global outturn, the continued capital deficit, financial sector instability and a poor business climate, amid other challenges,” he said.

“We offer a 15-point roadmap of action that in the short term will seek to reverse the current slowdown in growth and refocus the economy on a higher growth trajectory that is inclusive, sustainable, cross-sectoral and pro-poor.

“Therefore, as we enter the shadow of an election year in 2013, the lessons of the last four years must guide our political leaders to place the people and their developmental challenges first, appreciating the primacy of peace, mindful that as a people our only home and heritage is in Zimbabwe.”

The 15-point plan, according to Biti, would focus on restoration of food security, macroeconomic stability, keeping a tight lid on government expenditure, widening the revenue base, attracting foreign direct investment and promoting industrial competitiveness, among other aims

He said Zimbabwe, which currently has an income per capita of $370, needed double-digit economic growth rates in the next 15 years to eradicate poverty.

The minister, however, said despite a gloomy economic outlook, government had managed to keep inflation at single-digit levels, one of the lowest in the region.

In a bid to support key economic sectors, Biti said funds sourced from Old Mutual and the National Social Security Authority, which account for 40% of internally-generated funds, would be loaned out at an interest of up to 10%. This comes in the wake of depressed capacity utilisation for the manufacturing sector and subdued agricultural output due to capital constraints.

Budget Highlights