Chinamasa presents 2016 budget today

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FINANCE minister Patrick Chinamasa will today present his third budget, where he has little fiscal space due to the depressed economy.

by BUSINESS REPORTER

The economy is in deflation, facing liquidity challenges and faces de-industrialisation due to various challenges being faced by industry.

Patrick-Chinamasa-on-a-budget-day

The debt overhang remains a big challenge for the country, as it has been failing to attract fresh capital from the international financial institutions.

The country had a budget of about $4 billion for the past four years, meaning that nothing much has been happening on the fiscal side. Foreign direct investment remains a challenge for the country due to policy inconsistencies.

Of the $4 billion budget, over 80% of the revenue goes towards civil servants wages and salaries.

Revenue streams for the country have been shrinking and for the third quarter of this year, Zimbabwe Revenue Authority collected $878,22 million against a target of $964 million due to depressed economic activities.

The 2016 National Budget is projected at $3,85 billion, with optimistic growth rates of 2,7% and the agriculture and mining sectors are expected to drive the growth.

Treasury said in its Budget Paper for 2016, fiscal space remains narrow, implying reliance on private sources for financing of various planned development projects and programmes.

International Monetary Fund resident representative, Christian Beddies said the economy has been severely affected by numerous challenges and consequently revenues have not been growing.

“This is not sustainable and the government has been clear about it. Strong growth and conducive policies going forward are essential to allow for more capital and social expenditure. The government is also making concerted efforts to rebalance the budget and address the high wage bill,” he said.

Beddies said the downside remain and the projections for the agriculture and mining sectors take into account the challenges these sectors face.

The Confederation of Zimbabwe Industries and Zimbabwe Congress of Trade Unions have said government should come up with policies that encourage investments.

5 COMMENTS

  1. Whatever he does he should not increase any taxes..if anything he should be reducing same because these high taxes have had the net effect of dampening demand..in a VERY VERY BIG way. This has contributed an elephant’s share in the constriction of free flow of funds for productive purposes..Chinamasa will need to pull rabbits (not just one or two but a multitude!) from that idiot briefcase of his…this is uncharted territory…Perhaps he could dump the US dollar and bring back the Zim dollar and while everyone is wandering what hit them he can jump on the next available plane to anywhere never to return..Outside this, what can he do? And who took Zhuwawo’s whistle..he seems to have lost it. Or maybe he is being smart and playing the game better perhaps? Poor Zhuwawo had in a very short time AMPLIFIED how not to play this game.

    • my Aunty Brianna just got a great Lexus IS F Sedan just by some parttime working online with a macbook…

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  2. All indications are that the country will face serious hunger next year, job losses will increase, liquidity will worsen and there will be zero economic growth. Whatever Chinamasa might say-don’t believe him.

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