Chinamasa’s budget highlights

FINANCE minister Patrick Chinamasa yesterday presented the much-awaited 2014 national budget which is policy-oriented at a time socio-economic indicators are declining.

Below are some of the highlights:

The 2014 national budget is anchored on revenues of about US$4,120 billion (29,3% of GDP). Tax revenues to constitute US$3,824 billion with the balance of US$296 million being non-tax revenue.

  • Multiple currencies regime and indigenisation to stay.
  • Economy to grow by 6,1% premised on an active Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset) programme. This translates into a nominal GDP of about US$14,065 billion, up by almost 7% from the 2013 nominal GDP of about US$13,099 billion.
  • Average inflation is projected at around 1,5% in 2014. Exports are forecast to reach US$7,7 billion with imports at US$8,321 billion.
  • In 2014, agriculture is projected to grow by 9%, mainly driven by growth in maize (62,8%), cotton (27,8%), soya beans (26,7%) and groundnuts (56,8%), among other crops, while the mining sector is projected to grow by 11,4% on the back of planned investments and largely driven by strong performance in gold, diamonds, nickel and coal.
  • Demonitisation of Zimbabwe dollar balances: Conversion to US dollars for those accounts in financial institutions’ books should be completed by March 31 2014. US$20 million is required for this purpose.
  • Diamond output is projected to increase to 12 million carats.
  • Manufacturing is expected to register moderate growth rates of 1,5 and 3,2% in 2013 and 2014 respectively, driven by the foodstuffs, tobacco, drinks and beverages sub-sectors.
  • Alignment of minimum public servants remuneration to current poverty datum line levels as given by Zimstat using a staggered and progressive approach.
  • Current levels of minimum banks’ capitalisation to be maintained.
  • A US$100 million interbank programme supported by an international bank, the African Export-Import Bank, as a guarantor with effect from April 1 2014.
  • Reserve Bank of Zimbabwe debt of US$1,35 billion to be assumed by government and up to US$200 million capitalisation to act as banker to government and lender-of-last-resort.
  • Premiums on deposit protection levy to be reduced from 0,3 to 0,2% of total deposits without fixing a cap, but excluding government deposits and foreign lines of credit.
  • Measures that ensure surveillance of the entire diamond production, sorting and transmission to be introduced.
  • Electricity generation projected to grow by 4,5%, spurred by the rehabilitation project at Hwange and other small power stations.