Zimbabwe News and Internet Radio

Chinamasa faces big challenge with budget

By Tichaona Sibanda

Finance minister Patrick Chinamasa presents the budget on Thursday, the first since ZANU PF ‘won’ the much disputed elections in July. But since those elections the economy has virtually ground to a halt.

Zimbabwe Finance and Economic Development Minister Patrick Chinamasa. (AFP)
Zimbabwe Finance and Economic Development Minister Patrick Chinamasa. (AFP)

The liquidity crunch gripping the country has also paralysed the operations of parliament, where Chinamasa will present his budget to legislators who have not been paid for the past five months.

Both houses in parliament were forced to adjourn until January 29th 2014, because the government is broke and running on a shoestring budget.

Chinamasa, who has struggled since his appointment as Finance Minister to raise cash for government expenditure, will feel pressured to produce a pro-poor budget, following an order from President Robert Mugabe.

Closing his party’s annual conference in Chinhoyi last weekend, Mugabe told Chinamasa to go ‘find the money’ amid loud cheers and applause from thousands of party supporters.

‘You can’t say there is no money. Where is our platinum going? Where is our gold going? Where are our diamonds going? Mugabe asked.

Chinamasa recently revealed that efforts to secure financial support from the World Bank and the International Monetary Fund have been rejected, amid reports the country’s external debt now stands at $11 billion. He said the government’s appeal for debt forgiveness had also been refused by the multilateral lenders.

Former finance minister in the inclusive government, Tendai Biti, said the 2014 budget that Chinamasa will present on Thursday will be ‘fictitious’ as the government does not have the funds to back it up.

Addressing journalists on Tuesday, Biti said the government is in a de facto shut down, due to lack of revenue. He added that the government was likely to bring back the Zimbabwe dollar, abandoned during the hyperinflation era in 2008.
Economic analyst and lawyer Bekithemba Mhlanga said the reintroduction of the Zim dollar would be the straw that breaks the camel’s back.

‘I don’t think we will see the introduction of the Zim dollar during the tenure of this government. They would rather go back on promises made during the campaign period than bring back the Zim dollar which will effectively destroy the little that is there,’ Mhlanga said.

Last week economist Luke Zunga said he had doubts the national budget for this year will go beyond US$3 billion, and even that would be a stretch, because there is simply no money.

The economy boomed after independence in 1980 but took a major hit in 1997 when President Robert Mugabe gave in to pressure from war vets waging violent protests for pensions.

From 2000 the seizure of white-owned farms led to chaos in the agriculture sector and the economy shrank by half. In 2008 hyperinflation of 231 million per cent broke the national currency and left millions of people hungry.

The adoption of the US dollar and South African rand brought a measure of stability, but the government’s indigenisation policy has scared away all foreign investment. SW Radio Africa