BUDGET announcement delays by Finance minister Patrick Chinamasa to facilitate “extensive consultations” are likely to cause an increased fiscal deficit and anxiety in the business sector as it adopts a wait-and-see attitude.
By Paidamoyo Muzulu
Chinamasa last weekend told parliamentarians in Victoria Falls he will delay announcing the 2014 budget till late December or January next year as he consults all relevant stakeholders. The delay is, however, permissible under the country’s laws which only bind him to table the budget before the end of January.
Analysts say the delay will keep the country and business community in particular in limbo as they await government to signal the new direction for the economy.
If not passed before the end of this year, government ministries and departments will in January expropriate Treasury funds outside an approved budget.
Economist and development specialist Maxwell Saungweme said the delay was undesirable for the country’s struggling economy.
“It erodes the confidence of those who need to help us with loans and debt relief,” Saungweme said. “It promotes fiscal indiscipline as ministries will spend without guidance on expenditure limits.”
Another analyst Ricky Mukonza concurred with Saungweme, saying the delay keeps the nation in suspense as to the direction the nation is taking.
“The delayed announcement of the budget is likely to have the net effect of perpetuating the uncertainty that has characterised the post-July 31 (elections) period on the economic and political fronts,” Mukonza said.
“It is an open secret that government is operating on a hand-to-mouth basis and the announcement of the 2014 budget is a mere ritual which I don’t expect to change much.”
Political commentator Jonathan Gandari said the delay will further slow down economic recovery as industry will wait for government’s signal, especially on taxation.
“Companies will adopt a wait-and-see attitude until a budget is announced,” Gandari said. “Civil servants will remain in the dark about their salary increments thereby increasing anxiety within a sector critical to government delivering on its mandate.”
However, the country is still struggling to collect revenue, with the Zimbabwe Revenue Authority last month announcing it had missed its quarterly target at the end of September.
Since the July 31 elections, the Zanu PF government has not announced any major policy positions on how it plans to revive the economy that had begun to stabilise during the tenure of the just-ended coalition government. The coalition government adopted a policy called the Medium Term Plan to guide economic recovery after a decade of decline.