Full Zimbabwe 2018 national budget statement

Download here: 2018 Budget Statement Final

NewsDay will give you the full updates of the budget presentation

Fiscal Imbalances

  • At the heart of the economy’s fundamental economic challenges is an unsustainable Budget deficit, whose financing through issuance of Treasury bills and recourse to the overdraft with the Reserve Bank is untenable.
  • This is also at the core of factors driving the demand for foreign exchange, as well as creation of excess money supply, which is largely in the form of electronic RTGS and mobile money balances.
  • These money balances are accessible through RTGS transactions, card swipes, as well as such mobile platforms as Eco-Cash, One-Money and Tele-Cash. Physical cash is a small proportion of the economy’s overall financial sector liquidity.
  • Money creation, through domestic money market instruments which do not match with available foreign currency, only serves to weaken the value of the same instruments, translating into rapid build-up in inflationary pressures, to the detriment of financial and macro-economic stability.
  • This has seen growing mis-matches between electronic money balances and the stock of real foreign exchange balances, as reflected by cash holdings and nostro balances of banks.

15:51 Government has adopted a zero tolerance on land barons.

15:49Civil servants bonuses will be paid in 2018 but will be staggered.

15:36 On indigenisation, Government is, through the Finance Bill being submitted to this August House for the 2018 financial year, amending the Indigenisation and Empowerment Act, to bring the following into effect from April 2018:

Diamonds and platinum are the only sub-sectors designated as ‘extractive.’

Accordingly, the proposed Amendments will confine the 51/49 Indigenisation threshold to only the two minerals, namely diamonds and platinum, in the extractive sector.

The 51/49 threshold will not apply to the rest of the extractive sector, nor will it apply to the other sectors of the economy, which will be open to any investor regardless of nationality.

15:30 State Enterprises that exhibit potential will be reformed, while those which cannot be rehabilitated will be privatized or face outright closure.

15:21 A number of public officials continue to be engaged in the public service well beyond their retirement age. In this regard, from January 2018 Government will, through the Service Commissions, retire staff above the age of 65.

15:16 Money creation, through domestic money market instruments which do not match with available foreign currency, only serves to weaken the value of the same instruments, translating into rapid build-up in inflationary pressures, to the detriment of financial and macro-economic stability.

15:16 The mis-match between the supply and demand for foreign exchange, has also led to the emergence of foreign exchange premiums in the market.

15:12 Chinamasa highlighted that dealing with corruption in the economy was paramount. Re-engaging of the international community and having a free and fair election in 2018 will help Zimbabwe grow.

15:09 The governemt should increase the use of plastic money in rural ares traders must accept mobile money. Exports will be critical in dealing with the ongoing problem of cash shortages.

15:07 Inflation in 2018 is expected to average 3 percent.

15:05 “Our economy has not been performing to its potential and to the expectations of the citizenry, as demonstrated by low production and export levels, and the resultant prevailing high levels of unemployment, and a continuing deterioration in macro-economic stability”

15:00 Chinamasa now presenting the 2018 national budget

In retrospect:

In his 2017 national budget presentation, pegged at US$4 billion, Finance minister Patrick Chinamasa pledged to cut government expenditure, with the following highlights:

  • Economy to grow by 1,7% in 2017
  • Revenue of US$2,876 billion collected between January and October 2016 against a target of US$3,158 billion, a negative variance of 9,8%
  • Cumulative expenditure for January to October 2016 amounts to US$3,84 billion against a target of 3,32 billion, representing US$520 million overspend.
  • Employment costs to gobble 91% of revenue
  • Exports decline by 6,9% to US$3,365 billion
  • Import bill stands at US$5,35 billion against exports of US$3,365billion
  • A total of US$17 million of bond notes injected into the banking system
  • Freeze in prices and fees charged by public entities
  • Five cents health levy for every dollar spent on airtime and data
  • Resuscitation of Ziscosteel on the cards
  • Agriculture, which experienced a 3,7% decline in 2016, expected to grow by 12% in 2017
  • Mining sector seen growing by 0,9% in 2017
  • Manufacturing sector seen growing by 0,3%
  • 15% platinum tax reprieve extended to 2017
  • Growth rate of between 0,3 to 3% anticipated in other sectors in 2017
  • Capital inflows of US$692,4 million expected in 2016 against US$1,2 billion in 2015
  • Formal remittances fall to US$780 million in 2016 from US$935 million in 2015
  • Stock market turnover between January and October 2016 slumps by 29% to US$144,46 million.
  • Primary and secondary education ministry gets highest vote of US$800,3 million followed by Home Affairs allocated US$364 million
  • Defence ministry allocated US$340,5 million while health and agriculture sectors receive US$208 million and US$244 million respectively.
  • Wheat flour, luggage ware and school uniforms removed from the open import licence with effect from January 1 201

Meanwhile, on his inauguration speech last month, Zimbabwe’s new president Emmerson Mnangagwa pledged his government would engage the international community as he seeks to revive a collapsed economy after years of corruption and mismanagement.

As Chinamasa presents his budget today, it remains to be seen how government coffers were spent, and what the future looks like for Zimbabwe.

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15 Comments

  1. ko how far with the us dollars that were in the system.

  2. willyouprovideforex

    inflation @ what?. no 3% is too low except unless you guys come up with a means to realease the pressure for companies to source forex on the black market.

    1. GONO-ISM THREATENING
      THINK OF THE POOR TRADERS IN MESSINA, NO MORE US$, BONDS USELESS, & NOW I AM TO PAY SA TAX???????????????????????????????????????????????

  3. We need clarification on the use multicurrency .Kadhara kakasiya kauraya economy aka.

  4. Yes its not surprising the high drop in Revenue inflows from $1.2 bil in 2015 to $600m in 2016.The reason being bond notes intro in 2016.Remittances from European pensioners who reside in zim was $ 300m in hard currency but when bond was introduced these pensioners moved their receiving accounts to SA.I was looking forward to hear what the expectations on bond note.The ides that its only 17mil can only be told to grade 2s. We need to know the advantages of bond so far .The disadvantages or diseqiues we all know.But besides that the budget is not that exciting , 5 bil is pikinini.At least you should have given promising constraint to look up to but mmmm.

  5. 20 cents AIDS levy for every condom bought,

  6. josphat mugadzaweta

    so ED must not contest the coming elections since he is well over 75. the same applies to 90% of the zanoids. pakaipa pakaipa.

  7. Ko ICT yapihwa marii?

  8. how many over 65 civil servants are employed by the government

    1. ini ndo ziva one tobaiwa mudede ngaene ngaende

  9. Kugarakunzwananahamandishe Garanewako

    Hurumende inoziva here kuti, LAND BARONS ahasi mumaguta nema groth points chete. Asi kuti kana nemumaruva
    azara. Masango, kusanganisira mafuro emombe arikutengeswa zvikuru nemamwe maSabhuku. Vamwewo vamhu varikutengesa makura. Nzivi nemadhamu zvazara ihvu nechikonzero
    chekuti vanhu takugara pesese. Hurunde ngaisunge vanhu ava varikuita huori. Masabhuku nganye mazita avavose Zavoaenda kwamucinda nekwaMambo. ITAYI wongorore ndatopa

  10. Comment…lets see what the current president is about the guy promised us youth jobs . lets give him a chance before the ballot . after all elections are coming

  11. simbarashe G Makuvaza

    well done on the Youth officers for they did not have any value neither did they have a job description or qualification and moreso the country need to know why did we have them in the first place considering they were eating from the taxpayers money.

  12. Powers to be need to realise that “Value Addition”is the key to almost every Trading Venture and certainly to our extractive minerals namely,” gold, platinum and diamonds” via a Vibrant Jewellery Manufacturing Sector that has been brought to its knees by restrictive legislation and ineffective issuance of permits without the product required. Just one example.

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