‘Zanu-PF has failed, 2023 budget is exhibit of craft incompetence’ – Biti
Former Finance Minister Tendai Biti has described the 2023 budget as an “exhibit a of craft incompetence” and accused the Zanu-PF government of failing the country.
On Thursday, Finance minister Mthuli Ncube unveiled his 2023 budget which was dominated by the raising of value added tax (VAT).
He presented a ZWL4.2 trillion (about US$6.5 billion) budget in Zimbabwe dollars, a move that left critics arguing that the government was now collecting a large portion of its taxes in foreign currency, hence the budget should have been presented in United States dollars.
Ncube, invoking Plato, said his budget was anchored on “prudence, temperance, fortitude and justice.” In large part, however, he raised taxes and offered few breaks for taxpayers.
But Biti said the budget did not address the fundamental aspects that are needed to resolve the economic crisis in Zimbabwe.
“Zimbabwe is in the middle of a structural economic crisis characterized by poverty, disequilibrium, high inflation, an exchange rate crisis and total collapse of public services.
“For the third time in 20 years Zim is in the middle of yet another self induced recession created by high borrowing costs, relentless inflation and a squeeze on government payments to contractors,” the Harare East legislator said.
“The seismic headwinds required boldness, honesty and brinkmanship. Sadly the 2023 budget presented today was a banal self serving ritual in narcissism and power retention excesses, months before the 2023 election. An honest budget ought to have been presented in US$.”
Biti, the Vice President of the opposition Citizens Coalition for Change (CCC), argued that the country needed to dollarise to solve monetary challenges.
“After-all more than half of government taxes are now being collected in US$. This would then have allowed civil servants to be paid in US$. This would also have required the government to simply dollarise.
“As we have argued before, the exchange control mess, right at the center of Zimbabwe macroeconomic instability must be resolved by dollarization, floating of the Zim dollar, scrapping the FX auction and the gold coin. Sadly this did not happen.
“The mess of multiple exchange rates will therefore continue with consequent pricing distortions. The raising of VAT to 15% is an attack on working people and reflects the ideological viciousness of regime. It is elementary economics that in a recession taxes must be lowered to stimulate aggregate demand.
“The restoration of duties on basic commodities particularly in a festive season is equally sadistic and bankrupt. The imposition of mining royalties to be paid partly in actual minerals is equally zany. Apart from gold, how does one pay chrome, coal or a PMG as a tax?
“The projected growth rate of 3.8% in 2023 is ambitious and based on unsound assumptions. It ignores the shrinkage of the global economy, the effects of the Russia Ukraine war and more importantly the natural freeze of an election year.
“The underfunding of the health budget (11%) and public education is an indictment.
“However the pumping of huge resources into command agriculture betrays that this an election year and that the 2023 Budget is a power retention agenda. Truth is Mthuli and Zanu-PF have failed and the 2023 budget is exhibit A of craft incompetence.” Biti added.