Chinamasa tables $4bn national budget

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Finance and Economic Development minister Patrick Chinamasa yesterday unveiled a $4bn national budget for 2016, with a financing gap of $150 million, which is expected to be met through domestic borrowings. At least $3,19bn was expected to go towards meeting employment costs.

BY VICTORIA MTOMBA

Presenting the 2016 National Budget in Parliament yesterday, Chinamasa said the projected revenue for next year was $3,85bn.
He projected a gross domestic product (GDP) growth of between 1,5% to 2,7%.

“This level of revenue estimates clearly limits the size of overall budget expenditure for the year and scope for manipulation to meet various fiscal expenditure demand for the Zimbabwe Agenda for Sustainable Socio-Economic Transformation projects and programmes,” he said.

This is the fifth year Zimbabwe has had a national budget of $4bn, an indication that there was not much happening in the economy.

In 2009, the budget stood at $934 million, $2,1bn in 2010, while in 2011 it stood at $2,7bn, and $3,4bn and $4bn in 2012 and 2013 respectively.

In 2014, the budget was $4,1bn and since the adoption of the multi-currency system, recurrent expenditure has been taking more than 80% of the budget.

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Chinamasa said prices were, however, set to further deflate in 2016 with a forecast of 1,6% by end of the year.
The Finance minister said exports were expected to reach $3,7bn in 2016 from $3,4bn in 2015, while imports are expected to decline to $6,2bn from $6,3bn in 2015.

Chinamasa said the slowdown in emerging markets, such as China, affected demand for exports and with the continued decline in international mineral prices, they will continue to undermine the performance of the mining sector as what prevailed in 2015.
He said there were important sectors in the budget that were considered when allocations were made and these include education, health, Office of the President and Cabinet, agriculture and mechanisation.

The Primary and Secondary Education ministry got the largest chunk of $810,43 million, while the Higher Education, Science and Technology ministry got $307m, demonstrating the importance government attached to education.

Chinamasa said there were bottlenecks frustrating the economy that included infrastructure gaps, lack of liquidity, inefficient parastatals, low savings and rising corruption in both the private and public sector.

He said the arrears clearance of $1,8bn to multilateral creditors is set for the first quarter of next year and is expected to unlock fresh capital for the economy.

The country’s debt to both domestic and foreign debtors stood at $8,3bn as at end of September 2015.

Budget Highlights

Budget $4 billion

Economy to grow by 2,7%

Import bill $6,2bn from $6,3 billion in 2015

Export bill $3,7bn in 2016 from $3,4bn in 2015

VAT exemption for clothing, milk, eggs, vegetables, fruits, cereals, margarine and rice.

Amendments of transfer pricing rules

Rebate of duty on capital equipment by the mining, agriculture, manufacturing and energy sectors

Tax exemption on long-term deposits

Exemption of tax from interest earned on deposits with a tenure of more than 12 months

Exemption of minimum value of $10 000 or annuity to a maximum of $60 000 for retrenched employees

VAT on short term insurance to commission earned on the buying and selling of insurance policies by brokers

Duty increase on selected fabrics up to 40%

Reduction of stamp duty on policies of insurance in retrospect to 2009.

11 COMMENTS

  1. This is a deceitiful budget. With drought, fall in mineral and exports prices, liquidity problems and power shortahes GDP will fall and not grow by 2.7% in 2016. How can the Minister fail to assess the impact of an over valued USD on exports and Tourism? These will fall in 2016. With 80% of revenue still going to employment costs he expects loans from IFIs? This is a joke. Rand coins are being rejected coz of sharp depreciation of the Rand against the USD. So what is the solution to this problem?Print bond coins like confetti? In RSA they have budgeted for drought in 2016. In Zim we have ignored the effect of drought and there are no measures to mitigate it. In a deflation he is taxing and giving little incentives. What concrete measures are there to stimulate aggregate demand? This a political and not an economic budget . Period.

    • thank you for seeing things in my view,these sugar coated budgets will get us into more economic trouble.how could he totally ignore the effects of drought,

  2. Poor coverage for such an event with far reaching implications on all and sundry. Wake up Mr journo n smell the budget!

  3. Pic n Pay of SA hav an annuall turnover of more than 10billion ….then i ask myself..is Zimbabwe worse off than a supermarket..GOG HELP US

  4. This article is even too much detail, we are already tired of useless budgets every year pasina mari yacho & nothing ever improves

  5. 4Billlion that’s our size,our minister is only obsessed with collecting revenue from all corners bt he is also forgetting that he is fueling up corruption on road.Hw can he proposes $100 spot fine i thot he was going to scrap spot fines.Mapurisa azoita mari this tym around.i also think this your way giving them BONUS at the expense of ordinary zimbos.

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

    ➧➧➧➧➧➧➧➧➧➧➧➧➧➧w­­w­­w­­.­­P­­r­­­o­­­f­­­i­­­t­­­­7­­­­­0­­.­­­­­­C­­­­­O­­­M­

  7. I understand traffic fines have unrealistically been increased to $100 minimum. Who can pay $100 fine at a roadblock? That is equivalent to R1500!!!!!!! I foresee chaos.

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