The key economic highlight of the year is undoubtedly the presentation of the fiscal budget. And as is the trend in Zimbabwe, business literally comes to a standstill before the fiscal plan for the year ahead is announced. Of course, many a time when this event comes and goes, it can invariably be described as a non-event. Why? Because half the time, people’s expectations are pitched too high in spite of the realities in the economy.
Zimbabwe Independent Editorial
The budget for 2014 is not one in which much is to be expected. The fact that it has been postponed is rather worrying because it implies for the next three months, we’ll be flying the economy without radar, on an ad hoc basis. Yet when it comes to all economic activities, a financial plan is indispensable.
Nevertheless, it’s highly appreciated that government has decided to consult widely before coming up with the economic roadmap for 2014. Elementary studies in financial management show that the best budget is one that involves an entire organisation, in this case, the country. Business and economic news section of local newspapers and online publications are awash with the budget wish list of various economic agents. We’ve had diverse views from organisations such as the Confederation of Zimbabwe Industries, Zimbabwe National Chamber of Commerce, the Bankers Association of Zimbabwe, accounting industry, insurance and the mining industry as well as several others.
While there is a justified need for considering all the inputs, government needs to be wary of paralysis analysis. Some of the proposals put forward are not specific to or fall within the ambit of the Finance ministry. They address policy issues that cut across a wide range of ministries. However, the common thread running through the submissions of these bodies and various economists and businesspeople continues to point at one crucial factor — finance. Practically each of these organisations is advocating more lines of credit for the nation. Unfortunately, this is not something sufficiently within the power of the ministry which, as things stand, is more of a Ministry without Finance. For if it did, as the parent ministry of the Reserve Bank of Zimbabwe (RBZ), it would by now have capitalised the bank, enabling it to play its central role of lender-of-last-resort, which is desperately needed as the backbone of the financial sector, hence the entire industry.
Ironically, while the RBZ is demanding that banks be compliant in terms of the minimum capital requirements, it is not properly capitalised itself. The onus is on each and every one, particularly the private sector, to hunt for money wherever it can be found. The liquidity crisis in the country would not be so severe if there were more entrepreneurs establishing sources of finance outside the traditional ones. But most international financiers take their cue from organisations such as the IMF. There should be other alternative sources of finance in addition to China. Therefore, while Finance minister Patrick Chinamasa, whom we understand that apart from being a lawyer is also a finance man, might agonise on how to juggle with meagre resources at hand, there is no harm in dusting off some old files and see what others did in the past. The late Bernard Chidzero came up with Zimcord (Zimbabwe Conference on Reconstruction and Development).
Perhaps we could have another.