IN a rare admission of failure to arrest the economic slide, Finance minister Herbert Murerwa yesterday told parliament that the country was under siege
from lack of balance of payments support, skyrocketing inflation and under-performing agricultural sector.
Presenting the 2007 national budget, Murerwa said it was no secret that the country faced a crisis characterised by lack of balance of payments support, lines of credit, foreign direct investment and “deliberate efforts to undermine our economic turnaround initiatives”. He blamed sanctions by the West as one of the causes of current economic decline.
Murerwa said the country faced a number of economic challenges, including ever-increasing prices, distortions in the pricing of key commodities and utilities, unemployment and rising poverty levels.
Other woes include foreign exchange shortages, low industrial capacity utilisation, underutilised land, rising corruption in both the public and private sectors and deteriorating provision of basic public services.
Murerwa lamented the poor maintenance of infrastructure, inconsistent policy pronouncements, declining clarity over the role and accountability of the key institutions of government and perceptions of lack of commitment to effectively deal with the challenges facing the economy.
“One of the consequences of the above challenges is the emergence of very large income disparities, with the majority of the lowest paid workers earning below the poverty datum line,” Murerwa said.
“The deterioration in the welfare of our people has seen their capacity to access basic healthcare services, education, housing and other amenities collapse overnight under the prevailing hyperinflationary environment.”
He said this was happening at a time when a small proportion of the population was accumulating wealth, in part benefiting from the price distortions arising from some of the policies and facilities meant to protect the very poor.
“Regrettably, some of the wealth accumulation is a direct product of the prevailing indiscipline in our economy. We have amongst the citizens individuals benefiting from abuse of public resources and thereby contributing to unnecessary public expenditures and economic hardships,” he said.