Zimbabwe’s national budget can surpass the $10 billion mark if the country fully exploits chrome and gold mineral deposits, Speaker of Parliament Jacob Mudenda has said.
BY TATIRA ZWINOIRA
The national budget has been averaging $4bn for the past three years.
In a post-budget seminar held by the Parliament of Zimbabwe yesterday in Harare, Mudenda said in reaching that goal, there was need to answer how to close the $6bn budget deficit against the usual $4bn revenue inflows.
“Our pre-budget stance was on domestic resource mobilisation. My firm belief is that through domestic resource mobilisation, Zimbabwe’s annual budget can surpass $10bn. I did not hear the budget pontificating on the sale of raw chrome, whose reserves are abundant in and around Kwekwe, which when properly extracted and marketed, can generate approximately $3bn annually,” he said.
“Let me hasten to share with you the disappointment I felt when I learnt of a company, which is being denied permission to export chrome finds, whose proceeds were estimated at between $2bn and $3bn. Why should we cut our nose to spite our face?”
Mudenda said another area, which could help in closing the $6bn gap, was a look at gold mining, but the 2017 National Budget did not provide adequate resources to Fidelity Printers to capacitate small-scale gold producers as had been proposed.
He said capacitating artisanal miners with $1bn, could raise no less than $3bn to the fiscus.
Mudenda said there was need to look into the possibility of delaying the $1,8bn debt repayment in order to support small scale miners, who delivered 42% of gold to Fidelity Printers last year.
In 2015, Zimbabwe agreed to pay its combined $1,8bn to the three preferred creditors — the International Monetary Fund (IMF), the World Bank and the African Development (AfDB) — to unlock fresh lines of capital.
Zimbabwe has already repaid the IMF overdue obligation and hopes to clear the World Bank and AfDB’s arrears by April.
During the examination of Finance minister Patrick Chinamasa’s 2017 National Budget, legislators cited corruption as the reason the exploitation of minerals was not being explored.
“I am deeply concerned that the budget did not do justice to the exploration of Zimbabwe’s vast mineral resources, especially along the Great Dyke. Our knowledge of our mineral wealth underground should facilitate the securitisation of our minerals on a back-to-back loan against a mineral concession or going the route of outright sale of some concessions on a pre-payment basis,” Mudenda said.
Labour and Economic Development Research Institute of Zimbabwe director, Godfrey Kanyenze said the budget was doomed from the start, as the bulk of the revenue would go towards recurrent expenditure.
“We need to balance our books, therefore, we need to prioritise the things for national development,” he said.
Zimbabwe’s wage bill is 91% of the budget, with Treasury only left with 9% of the $4bn budget to use on government expenditure.