Zimbabwe Unveils $4 Billion Budget Projecting 2,7% Economic Growth in 2016
Chinamasa said the country's economy was expected to grow by 2.7 percent next year despite current harsh conditions.
HARARE, WASHINGTON D.C. — Finance Minister Patrick Chinamasa on Thursday unveiled a $4 billion budget proposal against projected revenues of $3.8 billion saying the deficit would be financed from domestic borrowings. He projected that the economy will grow by 2.7 percent next year. Nothing changed much in the budget proposal unveiled by the finance minister. As in the previous financial year, more than 80 percent of revenues collected by the government would still go towards funding public servants’ salaries. Chinamasa told a skeptical parliament that a civil service rationalization program will be implemented to reduce the government’s wage bill by $14 million per month. Chinamasa proposed that the bulk of the $4 billion budget should go towards funding the two education ministries at $810 million while Home Affairs, Health and Defense ministries were also among the top beneficiaries. He said the government will up its game in its effort to boost the economy with more support going to agriculture, mining, tourism and the manufacturing sectors, among others. The minister said vulnerable farmers would receive free agricultural inputs while commercial farmers would get support from commercial banks. Cotton farmers were the major beneficiaries of government support in the proposed budget. To further boost agriculture, Chinamasa said the 99-year leases would be securitized to make them tradable. He added that the controversial empowerment law would be further clarified before the end of the year as the government seeks to attract investment. Chinamasa also told parliament that the government will in the new financial year take over defunct Ziscosteel’s $200 million debt and retire all its workers next month to make it attractive to foreign investors. This all but confirms an earlier deal between Ziscotsteel and Essar Africa Holdings has collapsed. He said the country’s exports are expected to rise to $3.7 billion next year from $3.4 billion last year while imports will decline from $6.3 billion last year to $6.2 billion next year. The minister said donors are expected to support the country to tune of almost $180 million next year. For perspective reporter Jonga Kandemiiri turned to economic commentator Masimba Kuchera of the Centre for Disability and Development and economist Prosper Chitambara of the Labour and Economic Development Research Institute of Zimbabwe, who both concurred that the budget is still too way small. Chitambara and Kuchera said the budget is more of the same with nothing new to talk about.