Mthuli Ncube faces daunting task

NYASHA KUNYISWA

Finance Minister Mthuli Ncube will next week present the 2022 National  Budget,which is expected to extricate  the ailing economy  from crisis.

The budget will be presented at the backdrop of high corporate tax levels, low competitiveness, high debt levels,  runaway exchange rate, electricity  shortages, a shrinking tax base owing to rampant company closures, high unemployment rate, skyrocketing prices and acute shortages of foreign currency.

The budget will also be judged on how it deals with State entities, which have become symbolic of all  government failures.

Several analysts said  Ncube should  make hard decisions to deal with headwinds.

They said a repeat of fiscal slippage will worsen public finances, as fiscal deterioration has been caused by the economy’s failure to grow.

Government is expecting the economy to grow by 7.8% this year.

Canicio Dzingirai, an economics lecturer at Midlands State University said: “ Government should promote the productive sector and there is a need for (the minister)  to deal with depressed wages to boost consumption. Government expenditure must also promote infrastructure development .

“There must also be mechanisms to support  vulnerable groups.”

The Confederation of Zimbabwe Industries president, Kurai Matsheza said  the budget should strive to pursue macro economic stabilisation policy.

“The tax levels in Zimbabwe are too high. (Even those for) exporters are high at  45% . It should be reduced to about 20%.

“Government must expedite implementation of reforms streamlining exporting and importing procedures, eliminating custom delays and improving customs administration.” Matsheza said.

Zimbabwe National Chamber of Commerce CEO , Christopher Mugaga said the budget must ‘bring concoction of measures which are going to stop the loss of value for local unit’.

He also  said Ncube must deal with  several other headwinds such as  high unemployment levels , company closures,  perennial loss-making State entities,   among many problems.

There have also been calls to redollarise the economy.

But, Ncube is adamant.

“We do not intend to do that. The accounting currency in Zimbabwe is Zimbabwe dollars.

“We have allowed the US dollar to be used concurrently for domestic transactions because the arrangement is the appropriate one given the context of limited offshore credit lines for domestic banks and continuous threats to the economy from Covid -19,” Ncube said.