MDC Renewal Team leader and former Finance minister Tendai Biti last Friday shot down his successor Patrick Chinamasa’s economic projections, saying given the prevailing stagnation in most sectors, the economy would at most grow by 1,2%.
VICTORIA MTOMBA BUSINESS REPORTER
Chinamasa has projected that the economy would grow by 3% with most of the growth spurred by Zanu PF’s blueprint policy, Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset).
Speaking at a public discussion forum in the capital Harare titled “Creating a path for economic recovery what is happening and what needs to be done?”, Biti said the economy was in a recession as witnessed by massive retrenchments and decline in capacity utilisation levels.
“The Zimbabwe Agenda for Sustainable Socio Economic Transformation prediction that the economy will grow by 9% annually is a pipe dream. Either you are drunk or you are dreaming or both. It is not possible and ZimAsset prediction of 6,1% this year is a dream also. The minister’s downward production by 3,5%, if we grow by 1,2% we could have done well,” Biti said.
“I am struggling to say where the 1,2 % would come from. I know 0,5% will come from tobacco where we had 200 million kilogrammes that we have sold and tourism when we host the Sadc summit in August, maybe those sectors. One would have to struggle to see where those will come from.”
Biti said the Zimbabwe Revenue Authority (Zimra) was facing challenges in collecting taxes as most companies had retrenched and the economy informalised.
Biti said during the first half of this year, Pay-As-You-Earn and corporate taxes declined by at least 25%, forcing government to rely on Value Added Tax and excise duty.
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“PAYE and corporate tax are paid by people who are producing and the remainder produced by the supply side of the economy,” he said.
Biti said the extractive sectors that included mining and agriculture, especially the tobacco crop, would normally tick during a deflation as the goods were destined for the foreign markets.
Chinamasa recently admitted that he was failing to court foreign investors because of the country’s debt overhang and liquidity crunch.
