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Chinamasa Faces Daunting Task in Presenting Budget

LAST year former Finance minister Samuel Mumbengegwi made a record devaluation of the Zimbabwean dollar when he presented his budget.

He devalued the dollar by 11 900% to 30 000 from 250 which had prevailed since July 31 2006 in a bid to attract foreign currency on the official market.

He concluded his budget by admitting that it would not set the pulses of suffering Zimbabweans racing.

He was left  with little to do but waffle about stability — while avoiding to mention where the money was going to come from — and explaining the effect spending would have on the economy.

It made depressing listening Herbert Murerwa concluded his last four budgets by seeking divine intervention.

In 2006, he concluded his budget speech by quoting the Biblical prophet Jeremiah.

Chapter 29 verse 11 of his book states: “For I know the thoughts that I think toward you, thoughts of peace not of evil but to give a future and a hope.”

During his last budget in 2007, Murerwa closed his speech with another quote from 2 Corinthians Chapter 4 verses 16 and 17. But whatever he might have wanted to infer basing on the good word, he lost it.

Simba Makoni’s budget statements were presented amid expectation that they would breathe life into the failing economy by introducing measures that would help resuscitate the ailing manufacturing and mining sectors.

Instead, he always concluded by  pinning hopes of recovery on the collapsed agricultural sector.

Bernard Chidzero and Ariston Chambati and once acting Finance minister Emerson Mnangagwa presented their budgets when the economy was still sound and as such did not have a lot of headache during their presentations.

Acting Finance Minister Patrick Chinamasa unlike his predecessors will have a daunting task of presenting a budget when the economy has virtually collapsed.

Economist Brains Muchemwa said presenting a budget in local currency would not make sense since the currency was losing value at an alarming rate.

 “The only way the budget will make sense was if it is announced with figures being translated to foreign currency. This is the time to learn about the country’s health. Where the money will come from will paint a clear picture about the future. Will it be taxes and tariffs, domestic or external borrowing or will they print money?” said Muchemwa.

Economic analyst John Robertson said Chinamasa’s task was not an easy one as demands for supplementary budgets by ministries reflected the seriousness of Zimbabwe’s economic rot and raised serious questions over the government’s official inflation data.

“The demands were frightening when you compare to the original budget. This shows the magnitude of deep-seated inflation and is testimony that the government has failed to bring inflation under control,” Robertson said.

Robertson said government spending was too high and that there was inadequate cash being channelled towards infrastructure development.

Next Thursday  Chinamasa will present the 2009 national budget to parliament following a two-month delay caused by a deadlock over the formation of a coalition government.

The budget is traditionally presented in November but this had been put on hold in anticipation of the formation of a unity government involving Zanu PF and the two formations of the opposition Movement for Democratic Change (MDC).

Prospects of the unity government have dimmed after Monday’s deadlocked meeting between President Robert Mugabe and the leader of the main MDC formation, Morgan Tsvangirai. Chinamasa  looks to break with tradition and come up with a short-term budget, possibly covering three or six months.

Government officials this week hinted that the budget could be denominated in foreign currency in line with developments in all economic sectors where the more stable US dollar and South African rand are the preferred medium for business transactions.


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