2019 National Budget: The good and the not so good

Minister of Finance and Economic Development Professor Mthuli Ncube yesterday presented the 2019 National Budget in Parliament. His budget presentation was themed ‘Austerity for Prosperity’ and focused mainly on cutting government expenditure and maximizing revenue collection.

The budget was presented at a time when Zimbabweans are faced with acute cash shortages and currency distortions which have rendered their salaries inadequate. It also comes at a time when Zimbabweans are still trying to come to terms with the increase in the prices of basic commodities. As such, there were high hopes among Zimbabweans that the budget speech was going to proffer solutions that would help extricate Zimbabweans from the current economic dilemma.

Women’s Institute for Leadership Development (WILD) has studied the 2019 budget and has identified the good and the no so good aspects about it – especially as it affects women.

The good

  • The prioritization in terms of budget allocations has somewhat improved from the recent past. The top three allocations went to Education, Agriculture and Health. This is a break-away from a trend where defense would be allocated more than health or education thereby casting aspersions on the sincerity of the government in improving the lives of its citizens. Although the prioritization of education, agriculture and health is welcome, defense still received a high allocation and there is need for transparency in the allocation of farming implements.
  • True to the promises made during budget consultations, Prof. Ncube scrapped Value Added Tax and Customs Duty on sanitary wear. This will go a long way in ensuring that underprivileged women and girls have access to sanitary wear at a cheaper price. WILD and other like-minded organizations and stakeholders will monitor the actual implementation of this by other government departments. The lifting of VAT and Customs Duty should however go beyond the stated 12 months to guarantee continued access to sanitary wear for women and girls.
  • The retiring of youth officers whose job descriptions have been very ambiguous over the years is welcome. This will present government with fiscal space to be able to allocate resources to essential services such as supporting the implementation of free maternal health care.
  • In pursuit of fulfilling section 264 of the Zimbabwean Constitution, the Minister of Finance highlighted that he seeks to operationalize support to Provinces pertaining to provision of 5% of Government revenues to Provincial Councils. An estimated US$310 million in fiscal transfers is earmarked for support to Provincial Councils for 2019. This is the first time that devolution has been allocated any funds since the enactment of the 2013 Constitution. This empowers all provinces to plan and implement their economic growth and development.

The not so good

  • The demand for duty to be paid in foreign currency undermines government’s own declaration that the bond note/RTGS trades at 1:1 with the United States Dollar. This will affect women engaged in cross border trader trading who sell their wares in bond notes and need foreign currency to import their wares. The mere rejection of the bond note by government will destabilize the lives of Zimbabweans seeking to make an honest living.
  • Although Prof. Ncube proposed the 5% cut to senior civil servants salaries, he did not act on reducing the allowances of the concerned civil servants. Since the travel allowances often dwarf their salaries, it is important for treasury to also limit their travels as they may be used to compensate the salary cuts.
  • The proposed increase of excise duty on fuel with effect from 1 December may cause further price hikes as fuel retailers will pass on the cost to consumers who in turn will increase the cost of their respective goods and services. This will further push up the cost of living and will further impoverish Zimbabweans.

As the country journeys into 2019, it is hoped that the government will continue to work on curbing corruption and guaranteeing that the poor are catered for. There is a need to reduce the burden of taxation so that the gap between the rich and poor is reduced.

Source: Women’s Institute for Leadership Development (WILD)