FINANCE minister Mthuli Ncube was grilled over the benefits of his much-touted ZW$803,6 million budget surplus at a time the majority of Zimbabweans are suffering from a rapidly deteriorating economic crisis.
By Kudzai Kuwaza
In his Mid-Term Fiscal Review statement last week, Ncube said Treasury had recorded a budget surplus of ZW$803,6 million between January and June on the back of fiscal discipline in line ministries. Ncube said the attainment of a fiscal surplus, combined with a current account balance of US$196 million during the first quarter from a deficit of US$491 million for the same period in 2018, signalled improved confidence in the Transitional Stabilisation Programme.
Speaking during a Mid-Term Fiscal Review breakfast meeting this week hosted by the Zimbabwe Independent in conjunction with the Zimbabwe Economics Society, Confederation of Zimbabwe Industries chief economist Tafadzwa Bandama took Ncube to task over the use of the fiscal surplus.
“The most positive one (from the mid-term fiscal review) is the containing of the twin deficits. However, I should not say that there are red lights to that but amber lights to that,” Bandama said. “The economy has no fuel. The economy has no electricity and on electricity it is actually affecting the productive capacity.”
She said companies have been forced to reduce the number of shifts as a result of the power cuts that have seen workers being sent home.
Bandama said the surplus should be used to procure economic enablers such as electricity and fuel.
National Aids Council communications director Madeline Dube told Ncube that the impact of the surplus has not been felt by suffering Zimbabweans, adding that women have become the breadwinners in most households because their husbands have been unable to support their families as they are unemployed.
She added that the surplus announced by Ncube does not mean anything to the majority of Zimbabweans if it does not translate to food on the table. Dube said the talk of a budget surplus is in stark contrast to the situation on the ground where there has been a proliferation of sex workers in rural areas, a situation that had previously been unheard of.
“Just because they are called sex workers, it does not mean that (what they do )is work,” an emotional Dube said.
Economist Ngoni Chanakira pointed out to Ncube that the fiscal surplus should have been used to reduce the burden on the populace, particularly in the form of taxes.
“Given the success on the fiscal side, there should have been greater relief on the populace in terms of taxation and certainly on tax bands,” Chanakira said.
Ncube pointed out that the surplus had benefitted Zimbabweans,citing the subsidized transport offered to commuters through the Zimbabwe United Passenger Company as an example.
Institute of Chartered Accountants of Zimbabwe chief executive Gloria Zvaravanhu told Ncube that the tax –free threshold, which he increased from ZW$350 to ZW$700, is inadequate given the rate at which inflation is ravaging incomes.
The Treasury chief responded by saying that he will review the tax free thresholds when he presents the 2019 national budget in a few months’ time.