Mthuli Ncube's budget a recipe for disaster

 Mthuli Ncube's budget a recipe for disaster
Published: 13 August 2019 (91 Views)
FINANCE minister Mthuli Ncube's 2019 Mid-Year Budget Review will further fragment citizens socially and economically, especially the most vulnerable groups, given his new measures which will worsen the economic hardships plunging hard-pressed Zimbabweans deeper into poverty.

Delivering his budget statement last week in Parliament, Ncube increased the cost of basic consumer goods and a plethora of taxes - which are already unaffordable for many Zimbabweans.

Ncube slapped citizens with electricity tariff increase by at least 174 percent for farmers and domestic users from $9,86 cents per kilowatt per hour (c/kWh), to a whopping average of $27c/kWh - while non-exporting businesses were forced to contend with an even steeper 356 percent rise , an average of Z45c/kWh.

He further reviewed excise duty on fuel imports to 45 percent and 40 percent respectively for petrol and diesel, inevitably hiking fuel prices once again.

This means that businesses will be forced to push the cost to consumers a further burden on the hard-pressed citizens.
Expert economist Vince Musewe chided Ncube saying he has been focusing on getting access to International Monetary Fund (IMF) funding at the expense of the lives of Zimbabweans.

"Our main problem is that the new Finance minister is focusing too much on quantitative and not qualitative developmental economics. The main wish is to get access to IMF funding but this is compromising the quality of life of Zimbabweans.

"Inflationary pressures are increasing because of continuous re-pricing without the commensurate increase in disposable income and this is increasing poverty levels.

"This recent budget did more to increase the cost of living than increasing incomes and that is a recipe for disaster," he said.
Ncube also announced that his austerity measures for half of the year period had brought about a budget surplus of $803,6 million.

"I am certainly not excited but very concerned that we may be focusing too much on budget surplus despite the social impact costs of it. The budget allocations entrench the old economy…Zimbabweans are certainly losing hope especially as taxes increase with disposable income decreasing

"In short austerity is still with us but there is concern on who must sacrifice for that austerity," Musewe added.

Recently, Members of Parliament (MPs) brought Ncube to task over the budget saying that in his budget employees were getting a mere 37,19 percent increase from $4, 050 billion to $5,556 a sharp contrast to inflation which was last reported at 175,66 percent in June 2019.

Most employees in the private sector have not received substantial salary increments.

This means Zimbabweans are now earning much lesser than they were earning a year ago, leaving many Zimbabweans living way below the poverty datum line.

Buhera South legislator Joseph Chinotimba speaking in Parliament recently said workers' salaries were left at the rate of 1:1 yet the money was from US$1 to Z$3,50. "We did not convert it to the equivalent of the $3,50 that was at the interbank rate…Speaker, I am saying this because we are also representatives of the workers.  The workers are not getting any money.  It is not sufficient for them.  

"It should have been equated to the interbank rate.  We are saying, in this Supplementary Budget, the minister should have cushioned the civil servants and increased the salaries.  In fact, the money that was increased by Finance ministry should have gone to the Public Service ministry so that the workers could get adequate salaries."

This comes after Ncube allocated the second biggest chunk of the budget to his ministry.

"The issue at hand…is that diesel prices are going up, the bus fares are also going up and the worker is still on US$1 to Z$1 when he is now paying a fare of $5 from Glen View to come here.

To come from my home area Birchenough to Harare, they are now paying $70 and the worker who is earning $300 cannot visit his home area," added Chinotimba.

In his budget Ncube unpleasantly raised various transport-related tariffs, including tollgate, learners and driver's license and vehicle registration fees by 400 percent in tandem with the changes the depreciating Zimbabwe dollar.

- dailynews

Tags: MthuliNcube,
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