Zimbabwe’s Finance Minister will be walking a nasty tight rope when he presents the country’s national budget, for 2016 on Thursday. The government has been battling to meet its expenses, as revenues flow, and economic growth slows down. As has become tradition Patrick Chinamasa will disembark from his vehicle brandish his briefcase to the media before walking through these doors. And that’s as far as the pleasantries will go. There after it will be down to the difficult task of trying to stimulate economic growth from a shrinking purse.
What will Chinamasa focus on come Thursday? He will have to focus on narrowing the current account deficit which is critical and coming up with a plan to improve revenue inflows.
“I am expecting the minister to introduce a raft of progressive taxes that do not put undue burden on the low income earners so may be he needs to adjust tax free thresholds and also the issue of expenditure, we are expecting that he will allocate more expenditure to projects that increase productive capacity to improve economic growth.” Said Prosper Chitambara, an Economic Analyst
Chinamasa is expected to try to prop up the agricultural sector which declined by 8,2 percent this year. The impending El Nino phenomenon will see millions of dollars diverted to secure food aid, piling further pressure on the fiscus.
Mining could help salvage things. It was projected to grow by 3,5 percent this year but it too faces an uncertain future due to tumbling commodity prices. But Government plans to ramp up production volumes and value add, locally which could still see an expansion.
Analysts want a major statement on stamping out corruption, which will consolidate the progress Zimbabwe has made in winning over its international creditors. Last month it got backing for a debt management strategy after impressing the IMF in implementing reforms. Thursday will be a chance to show further commitment to the process, and that could mean trimming the civil service, which currently gobbles up 80 percent of revenue.
Earlier this year a target had been set to slash that share of the national cake by half by year end, but its so far proved easier said than done. The absence of a social security system to cater of the jobless could make this untenable for the time being, making Chinamasa job all the more difficult.