Mthuli must deliver more than the usual promises
Today, Finance Minister Professor Mthuli Ncube steps into Parliament to present the 2026 National Budget, with both business leaders and the nation at large demanding more than the usual promises and projections.
This fiscal plan is not merely another entry on Treasury’s annual calendar, it is a defining credibility test for a government running out of fiscal space, investor trust, and public patience.
Zimbabwe faces a stark economic reality. Public debt has surged to US$21.5 bn, the formal sector is shrinking, and revenues are increasingly undermined by a tax system that punishes formality while rewarding informality.
With 74% of the economy now informal, the tax base continues to narrow, tightening an already overstretched fiscal environment. Against this backdrop, today’s budget must demonstrate not only intent but conviction.
At the core of expectations is an urgent demand for a clear, executable arrears clearance and debt resolution plan.
Zimbabwe’s isolation from global capital markets will persist until the country confronts its debt head-on.
Zimbabwe is battling US$12.6 bn in external debt, much of it arrears, and US$8.9 bn in domestic debt, which is straining banks and constraining long-term lending.
Economists insist credibility begins with transparency.
Tony Hawkins put it bluntly: the nation needs “an honest statement of national debt… and a detailed and honest set of Mutapa accounts.” Without that transparency, the budget risks being dismissed as yet another carefully worded document masking uncomfortable truths.
Debt is not the only structural challenge demanding bold action. The Intermediated Money Transfer Tax (IMTT) has become the most contentious point of friction between government, business, and citizens. Treasury sees it as a vital revenue source; industry views it as a chokehold on productivity, investment, and competitiveness. The Confederation of Zimbabwe Industries has called for its complete removal, arguing that it is now economically distortive. Banks have echoed the warning, noting it deters formal banking and entrenches informality.
Yet the political dilemma is real: reducing or scrapping the IMTT risks shrinking already thin revenues; keeping it risks suffocating formal business activity further. Economist Enoch Rukarwa warns, “as informality rises, revenue collections fall,” deepening the fiscal crisis. If Ncube does not address this tax decisively, the economy will continue drifting further into the shadows.
Beyond taxation and debt, the budget must confront deeper structural fractures. The transition from NDS1 to NDS2 cannot be reduced to another slogan-driven exercise. Zimbabwe needs a manufacturing revival, reduced regulatory burdens, stable power supply, and strategic investment in technology and competitiveness. As Titus Mukove observes, without boosting production and productivity, rhetoric around stability will remain disconnected from lived reality.
Professor Ncube has repeatedly pledged strict fiscal discipline, a deficit under 3% of GDP, and zero central bank financing.
These commitments are necessary, but they must now be matched by transparent reporting, pragmatic decision-making, and political courage.
