LIVINGSTONE MARUFU
Finance minister Mthuli Ncube’s Mid Term fiscal policy review failed to address the effects of the ravaging Covid-19 pandemic amid fears by economists it could trigger an economic upheaval.
Analysts say Ncube should have come up with policies that could revive the industry as many companies are struggling to stay afloat and have thrown thousands on the streets.
Economist Gift Mugano told Business Times that Ncube created a recipe for disaster for the government.
Mugano said the failure to extend the stimulus package to the manufacturing industry in light of the ravaging Covid-19 came as a surprise as various companies have no working capital towards retooling and re-equipping.
He said that this could cause company closures especially small to medium enterprises thereby pushing many people out of work.
“The mid-term is a ticking time bomb which could result in social unrest as it failed to address the poverty that has risen from Covid-19 which caused the closure of many companies and rationing of workers,” Mugano said.
“With most civil servants receiving way below the poverty datum line, there is a possibility of strikes and protests as they are not able to put enough on their table. The minister should have done the balancing act of increasing salaries at the same time not overspending,” Mugano said.
The analysts said Ncube should have scrapped the contentious 2% intermediated mobile money transfer tax to spur business growth. They said he should have also come up with policies to deal with social safety nets, amid revelations that about 49% of Zimbabwe’s population is living in poverty.
The situation has been exacerbated by the deadly Covid-19 pandemic which the economists said Ncube failed to come up with measures to address the virus crisis currently ravaging the economy.
A pro-poor budget, economists said, could have raised the hopes of the Zimbabweans. But, Ncube decided to give an appraisal report instead of policies that could turn around the economy.
Another economist who preferred anonymity said Ncube’s statement is anti-poor.
“The mid-term has failed to provide proper safety nets for its poor, with more people being retrenched. The majority of the population will be impoverished, people are likely to fight for better living conditions and skyrocketing prices which are beyond the reach of many,” said the economist.
The economists concurred that new policies were supposed to be implemented on the strategy to fight poverty and Covid-19 as when the budget was planned, the pandemic was not that deadly as it is now.
Zimbabwe experienced deadly second and third waves in January and June respectively causing business to cut trading hours.
Mugano said he was disappointed by the failure to spend by most ministries at a time when the economy needs the utilisation of the available resources.
“Various ministries have spent less than 35% at a time when the country is fighting Covid-19, this has caused the Treasury to reduce resources and cut supplementary budgets.
“But the most disappointing ministry is Industry and Commerce which has spent 9% of its budget when the industry has no working capital and has obsolete machinery, the ministry should do better to capacitate companies,” Mugano said.
