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Eric Bloch Column

The nation’s wish-list for the 2004 budget

By E

ric Bloch

THE arrival of the Minister of Finance and Economic Development, Dr Herbert Murerwa, at parliament with the renowned black briefcase containing Zimbabwe’s 2004 budget proposals is imminent. Officially that is to occur on Thursday, October 23, but if the experiences of recent years are anything to go by, there will undoubtedly be a rescheduling of dates and it is more probable that the budget will only be presented on either November 13 or 20. That remains to be seen!

Officials of his ministry are working vigorously and for hours far greater than are normal for the civil service, in an endeavour to produce next year’s budget. They are very well aware that they are confronted with a virtually insurmountable task, for they need to ensure that government spending be frugal and at levels that do not create an unsustainable deficit and further massive growth of the national debt. But doing so is gravely hindered by the difficulty of obtaining sufficient revenues to meet essential expenditure, for the distressed state of the economy is such that the budgetary craftsmen know that exacting state revenues from that economy must not be to an extent as will exacerbate the distressed economic state.

They are aware that, in fact, there is a very great need for the budget to be one which can stimulate economic recovery, but on the one hand resources required to incentivise development of the economy are minimal and, on the other hand, the officials are very aware that an environment conducive to economic wellbeing cannot be created without political will, and it is not within their ability to make the political hierarchy transform and bring such an environment into being.

Nevertheless, there is a great deal that desperately needs to be dealt with constructively in the budget. First of all, the ministry must emphasise firmly to the president and cabinet that prioritisation of expenditure must reign supreme. Essentials must be serviced before perceivable desirables. Thus, of greatest importance is that the Ministry of Health and Child Welfare be given a Vote sufficiently great that the health needs of Zimbabweans can be fully addressed. That ministry’s Vote must, in real terms, suffice to pay doctors, nurses and other medical personnel, meaningful market-related salaries, and to ensure that hospitals do not have to close for lack of food, or patients suffer or die for lack of medications. All equipment must be maintained in constant working order.

In like manner, the two education ministries are in very great need. They are unable to pay fair salaries to university lecturers, teachers and others. They cannot provide schools and institutions of higher learning with necessary and sufficient teaching and learning aids. And the Vote for Social Welfare needs to be very markedly increased, for ever more Zimbabweans are becoming impoverished to the point of total despair and jeopardy to very survival. It is estimated that Zimbabwe has almost 500 000 Aids orphans, and nearly four million afflicted with HIV or full-blown Aids. Well over three million Zimbabweans are unemployed. Pensioners are suffering grievously as their miserably low pensions have their purchasing power continuously eroded by the ravages of Zimbabwe’s hyperinflation.

But meeting increased funding for these ministries means that other expenditure must suffer draconian reductions. And it should be readily possible to do so. There can be no justification for the vast expenditures of the Ministry of Information and Publicity. Many, many millions, if not billions, are expended upon endlessly repeated advertisements and jingles on radio and television extolling (falsely) the magnificent achievements of Zimbabwe’s ill-conceived, and even more ill-managed, land reform programmes.

Even more is spent to fight the battles of the ruling party by endless attacks on opposition parties, being a gross abuse of public funds. Surely, if money is to be wasted upon such fruitless and meaningless outpourings of political vitriol, it should be the monies of the ruling party, not of the state? And still greater amounts are spent by that ministry on endless dissemination of disinformation. It is not within the authority of the Ministry of Finance and Economic Development to dissolve the so-called Ministry of Information and Publicity, but it can at least try to curb and contain its wasteful expenditures.

A second area where expenditure can undoubtedly be reduced would be by a significant slashing of the Vote of the President’s Office. A reduction in the gargantuan infrastructure necessitated by an excessive number of Ministers of State in the President’s Office, and by a destructive network of misplaced information gathering by the Central Intelligence Organisation (CIO) would save vast sums. So too would be a marked curtailment of international travel by not only the President but also by an ever-present, vast entourage.

The reduction in Votes of other ministries would also contribute to provision of funds that should necessarily be spent. Foremost of them are the Ministry of Foreign Affairs and of the Ministry of Defence. The former maintains a worldwide network of embassies and supportive infrastructures, but to little beneficial purpose.

Policies by government at home negate any possibility of good relationships with many of the countries in which Zimbabwe has a diplomatic corps, and few of the embassies are able to contribute constructively to trade between their host countries and Zimbabwe, for Zimbabwe’s economic mismanagement increasingly destroys opportunities of economic trade.

At least half of Zimbabwe’s embassies abroad should be closed, thereby saving monies which can be put to more productive use, whilst at the same time reducing the drain upon Zimbabwe’s scarce foreign exchange resources.

Likewise, Zimbabwe needs to diminish substantially its expenditures on defence. The foolhardy involvement in the Democratic Republic of the Congo which cost Zimbabwe untold billions, has ended, and Zimbabwe is at peace with all its neighbours. Whilst some defence infrastructure is always necessary, Zimbabwe cannot require one of the present magnitude, involving massive costs beyond Zimbabwe’s means.

One further major opportunity exists to contain expenditure by government, and thereby to having the funding for essential purposes, and that is for a determined implementation of measures to reduce corruption within the public sector. Corruption is not an exclusive domain of that sector, being also very pronounced within the private sector, but that does not detract from the magnitude of corruption in many of the corridors of government.

The populace abounds with stories of demands for “commissions”, “fees”, and “goodwill gestures” in order to steer contracts in the direction of those upon whom the demands are made. Wheresoever those in the private sector are unlawfully succumb to those demands, they add the amounts involved into their contract prices.

Effectively, therefore, it is the state itself which is paying the bribes! Just as prevalent is the abuse of state assets by some within the public service.

There are those who believe it is a right of their employment by government to make endless domestic and international telephone calls of a private nature from their offices or on state-financed mobile telephones. They consider they are similarly entitled to avail themselves of stationery, petroleum and other government resources for their own, private purposes. The ways of abuse of state assets and of other corrupt acts are countless.

Of course, in order to finance very necessary expenditure, be it on health, education, motivation of economic growth, or otherwise, the government must necessarily not only look at expenditure reduction, but also at revenue enhancement. Most effective and nationally beneficial is to ensure the recovery of the economy, and the economy’s continuing growth, which would automatically broaden and expand the taxable base.

That will take time, but can be accelerated if, on the one hand, the Ministry of Finance and Economic Development could convince the president and his cabinet of a drastic transformation of policy. On the other hand, although not as expeditious and effective, some economic growth can be brought about by constructive and meaningful incentivisation, as distinct from often meaningless or unsubstantial tax-based incentives.

And balancing the budget would also be facilitated very considerably if Zimbabwe did the necessary so as to cease being an international pariah. Was it to restore law and order, revert to a democracy, restructure the land reform programme constructively, repair its international relations, and pursue a deregulation of the economy instead of a command economy, government would find much financial support forthcoming from beyond Zimbabwe’s borders.

Regrettably, the prospect of the 2004 budget being founded upon any of the aforegoing is exceptionally remote.

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