A BUDGET is a plan quantified in monetary terms and every organisation or entity needs a budget to make decisions. The budget could be a short-term or long-term one depending on the situation or environment in which the budget has been prepared.
As such our country has been presenting national budgets since Independence for strategic decisions in order to attain the set objectives or goals for the nation. When a budget fails to meet the goals which it was set to attain, it becomes necessary to review the whole budget preparation process and make the required adjustments so that it conforms to the required standards.
Sadly in Zimbabwe since 2000 there has been Supplementary Budget after Supplementary Budget. This means the national yearly budgets were not able to complete the period. The problem has not been with the budgets per se but those who prepare them and the environment.
Truly speaking the $7,84 quadrillion budget announced by Samuel Mumbengegwi will be spent by February 2008. The other ministries proposal had amounted to $42 quadrillion leaving an appalling shortfall of $34,16 quadrillion from the budget announced. In other words the budget is less than a quarter of the required funds for use by different ministries/sectors meaning that the money is too little, not withstanding the source of the funds.
What makes the budget “cosmetic” is its concomitant statistical projections of inflation and the 4% growth in the economy. Anyone who believes that in our hyper inflationary environment and complete disregard of property rights by the government the economy will improve, must be living in wonderland. The current official inflation rate is at more than 14 000% and thinking that by December 2008, it will recede to 1 978% is day dreaming.
The budget puts its hope on agriculture with this season blindly and insanely dubbed “Mother of all agriculture seasons”. This is tantamount to putting all eggs in one basket, because agriculture is but one of the sectors which drive the economy. The budget pays “lip service” to mining, manufacturing and other sectors.
The only practical government revenue base is through tax, so naming the budget “The people’s budget” is mere blackmail and unforgivable. Although Mumbengegwi increased the tax free threshold from $4 million to $30 million with effect from January, this is meaningless in line with infation. Instead he should have reduced the tax bands thus giving relief to workers.
What makes everything gloomy is the fact that there is a shortage of local currency in banks. Gono continues to pontificate about introducing a new currency. What hogwash! As long as the economy is in shambles like this, introducing a new currency is a waste of time and resources.
The Mines and Minerals Act which allows the government to grab 25% of shares in all foreign-owned mines helps to kill a sector capable of providing the country with the much-needed foreign currency. The Indigenisation and Empowerment Bill is another piece of shoddy legislation meant to completely destroy the economy. It forces all foreign owned companies to renounce at least 51% to “blacks”. Faced with an array of man-made and natural problems, planning becomes difficult hence the need to have quarterly or half yearly budgets.
One has to sympathise with poor Mumbengegwi for the shoddy job that he did, because he was instructed to do that by Mugabe. Without change of political colour budgeting in Zimbabwe will remain an unnecessary and unworthy exercise.