HARARE–Zimbabwe’s national revenue collections will contract by 64 percent in 2019 in response to policy and currency interventions made by Finance Minister Mthuli Ncube since October 2018, ENN reports. This is confirmed by financial statistics in Finance Minister Mthuli Ncube’s 2019 supplementary budget. Presenting his ZWL$14.06 billion national budget, which is equivalent to US$1.45 billion at the prevailing exchange rate, Mthuli Ncube shrunk the country’s revenue forecast by 64% from the 2018 budget of US$4.1 billion.
Presenting his US$4.1 billion National budget for 2018 themed “towards a new economic order” on the back of a 2017 budget deficit of US$2.6 billion, former Zimbabwe Finance Minister Patrick Chinamasa forecasted Zimbabwe’s 2019 revenue collections at US$5.48 billion against total expenditures of US$5.89 billion. Chinamasa’s 2019 budget estimate had a budget deficit of 7% and was supported by a projected nominal GDP of US$21.1 billion and a real GDP growth of 5.6%. This is in stark contrast to Mthuli Ncube’s latest budget which is leveraged on a US$1.45 billion total revenue (ZWL$14.06 billion) against a total expenditure of US$1.92 billion (ZWL$18.62 billion), giving a budget deficit of 25%. Mthuli Ncube’s 2019 supplementary budget also forecasts a negative growth in GDP for the year.
For a small nation as Zimbabwe, it is unsettling to note the magnitude of differences between Patrick Chinamasa’s 2019 economic forecasts and Mthuli Ncube’s US$1.45 billion “Austerity for Prosperity” 2019 national budget, which initially forecasted national revenues at US$8.2 billion for the 2019 fiscal year before the supplementary adjustments as Zimbabwe tried to align to its ambitious vision of being a middle income economy by year 2030. This anomaly is indicative of a national government that operates in silos, unable to tap knowledge from its predecessors for work continuity and national economic stability.
Patrick Chinamasa’s budget was guided by the ruling party dominated government’s blueprint – ZimAsset, and it also leveraged on the Interim Poverty Reduction Strategy Paper (I-PRSP) for 2016 to 2018. With its shortcomings on containing government expenditure and corruption, policy interventions in the 2018 budget had business and citizens at heart, most Zimbabweans claim today.
On the other hand, incessant variations in Mthuli Ncube’s two 2019 budgets, as well as significant revenue variations from prior forecasts by Former Finance Minister Patrick Chinamasa present a situation of a Government whose vision is laid on shifting sands. As Zimbabwe experiences another wave of price increases courtesy of Government’s latest policy interventions on fuel and energy on the back of a national drought, businesses continue contracting under Zimbabwe’s new leadership, a tax regime whose appetite for tax revenue defies its commitment to building an inclusive economy that is open for business.
Zimbabwe’s solutions lie with its people, and Government’s isolated policy pronouncements will deter progress that had been made in the mining sector, which contributes 68% of Zimbabwe’s GDP. These shifting sands will also affect Zimbabwe’s agricultural sector which contributes about 19% to Gross Domestic Product and guarantees national food security. According to the 2016 national budget, the agriculture sector provides direct and indirect employment to an estimated 60% of the population, supplies 60% of the industrial raw materials and contributes 30% towards export earnings. If charity begins at home, will investors come to Zimbabwe at a time its local businesses are crying foul? At this rate of ambush policy pronouncements, infrastructural decay, currency policy confusion, political conflicts and economic contraction, Zimbabwe is ruining its economic recovery prospects.