Biti’s budget allocation people-friendly

FINANCE minister Tendai Biti recently presented his long-awaited 2013 budget.

Opinion by Peter Gambara

Even prior to the presentation, analysts said he faced an enormous task in trying to work with a revenue estimate of US$3,8 billion. His major challenge, as he put it himself, was to try and ‘broaden and deepen the revenue base’.

However, Biti tried to address all the issues that came from the budget consultation process.

He had to address the issue of civil servants’ salary increments; he had to deal with issues to do with investment in energy generation and infrastructure development; he had to set aside something for struggling industry as well as agriculture; he had to put in place measures to try and protect the manufacturing sector from massive imports from the south and he also had to set aside funds for a referendum and elections due next year.

About 68,7% of total budget expenditure, or US$2,645 billion, had to be set aside for civil service salaries after increasing them by an inflation adjustment of 5,5%. It is surprising that the civil service associations still want a doubling of their salaries. Such a scenario would see the whole budget go towards civil servants’ salaries.

The associations risk becoming irrelevant here by demanding that the least paid workers who earn about US$290 should get at least US$600 (the poverty datum) per month.

Question: Is the least paid civil servant, the office orderly or groundsman, underpaid if he/she is getting US$290 per month before housing and transport allowances? Salary surveys are available on the market for everyone to peruse.

If the truth be told, that person is actually getting more than what a similar person would be paid in the private sector.

The real issue should be that professionals in the civil service like teachers, nurses and those with degrees in the civil service are being underpaid. Civil service associations should sharpen their arguments to remain relevant.

While in the private sector management and employees sit down at Works Council meetings to assess and agree on how well the company is doing, and agree on levels of salary increments, the same is not happening in government.

Labour minister Lucia Matibenga is not doing us any favours by refusing to meet the civil service associations. She should meet them and let them lay down their demands, but also important, let them say where they expect the resources to double their salaries come from.

The most interesting issue to come out of the budget was the 15 point plan. Hats off to our cabinet for having come up with such a brilliant plan, although it remains to be seen whether it will be implemented.

The plan is a good basis for moving ahead. It touches on many issues, including deepening and expanding the revenue base, controlling expenditure, efforts to improve our exports, addressing agriculture and food security issues, attending to social service issues of health and education and finalising the reform agenda as it relates to parastatals, labour market, pensions, issues of security of tenure and the state procurement board.

Biti mobilised US$10 million for the livestock sector, which continues to suffer from effects of drought in the southern parts of the country, with US$7 million coming from the private sector.

He also set aside funds to top up the irrigation development funds, as well as a land information management system, which will facilitate keeping of records on who owns what.

Government will also avail US$5 million in addition to some US$19,3 million provided by private partners, that will go towards assisting vulnerable farmers with inputs. We hope the inputs will be moved with speed so that they reach the intended beneficiaries on time.

Biti acknowledges that the country needs US$4 billion to support infrastructural rehabilitation and development as well as to boost the sluggish economy.

However, the challenge remains how to mobilise such funding in the absence of support from traditional funders like World Bank and African Development Bank.

The minister has announced that he had concluded arrangements with Afreximbank for a US$70 million facility, in addition to the US$565 million that he had set aside for the capital budget for 2013.

This will go towards the rehabilitation of the Hwange thermal power station, upgrading of the roads network, housing development, ICTs and rural development.

While government played a great part in providing housing to the low and middle income families after Independence, it seems to have slept on the job of late. A lot of families are eager to build their own houses, but they cannot find serviced stands at reasonable prices. Private developers are just fleecing potential homeseekers by selling them literal bush areas without any roads or other services as water and electricity.

The presentation of the 2013 budget came a week after the presentation of the Confederation of Zimbabwe Industries (CZI) survey that actually shows capacity utilisation in industry has gone down from an average 57,2% to 44,5% over the past year.

Over the years Biti seems to have ignored pleas from industry for some kind of protection against massive imports from the south that were crippling local industry, but it is good he now appears to accept that there is need for some kind of intervention.

He imposed a 25% surtax on soap, meat products, beverages, dairy products and cooking oil, in addition to imposing a US$1,50 per kg or 40% customs duty on imported chicken. What a relief to local industry!

At long last the minister seems to have done something on the interest rate issues in the banking sector! He has now realised that moral suasion is not working with the kind of banks we have here.

His suggestion to create an ombudsman to oversee the operations of the banks is most welcome. Curiously, what happened to the government ombudsman who used to handle complaints against government? Biti also proposed measures to recapitalise the Deposit Protection Fund.

It is clear the minister listened to concerns and requests for resource allocations from a wide spectrum of people and groups.