HomeOpinionThe role of state budget in poverty alleviation

The role of state budget in poverty alleviation

By Fay Chung

The  state budget is  of critical importance for the eradication of poverty in the country.  As reiterated above a concerted effort of at least fifteen years is needed, although it can start with a five–year plan, developed further every five years.

An examination of the 2019 Budget indicates how little importance is generally placed on poverty alleviation.

Four key ministries have received focus  as shown in Table 1: Vote 8, Agriculture, Water and Rural Resettlement;  Vote 13, Local Government and Public Works; Vote 14, Health and Child Care; Vote 15, Primary and Secondary Education.  These four ministries show how much the state prioritises Poverty Alleviation.

Except for Agriculture with purportedly  20.03% of the budget, the other three ministries received inadequate amounts, as shown under columns B, C, D and E.  The figures used come from the Ministry of Finance and Economic Development, Proposed Budget Estimates for the year ending December 31. 2020.

The figures are actual figures for 2019:  these have been utilised as they reflect actual figures rather than notional figures which can be altered later.

These four ministries are the key ministries for poverty alleviation: Agriculture and Lands because both agriculture and resettlement are of critical importance if Zimbabwe is to address poverty alleviation realistically;  Local Government and Public Works because both housing and public works will play a huge role in poverty alleviation over the next two decades; Health and Primary and Secondary Education, the two most critical areas where the poor must be served come what may.

Table 1 assumes that the four ministries allocations can be rationalised in such a way as to support poverty alleviation.  Agriculture and Lands’s 20.03% of the budget has been adjusted to about 10.5%, whilst the other three ministries have had substantial increases.

Local Government and Public Works has increased from 1.41 to 4.5% of the actual budget; Health has increased form 4.41% to 4.5%; and Primary and Secondary Education from 5.97% to 6.50 of the budget.

This gives a total of 26% of the budget which can be assigned to poverty alleviation.

Some substantive changes are required in each of the four ministries.

Agriculture and Lands have to come up with dependable legal regulations which would stabilise the land holdings, in such a way that all land owners whether high, medium or small scale can access bank loans and have time based legal tenure; Local Government and Public Works need to increase investment into housing, for example for civil servants, part of whose salaries could cover mortgages; and Public Works especially for infrastructure should be massively increased:  these two policies will bring about a huge increase in short term contracts under Public Works, making a noticeable transformation of rural infrastructure, particularly much needed small dams; Health should make decisive programmes to deal with the health of under-fives and over-sixty fives.

Primary education should return to the agreed policy of Free Primary Education, but with parents able to provide voluntarily for additional investments as per their ability to pay.  The state can supplement poorer areas.

Conclusion

The above draft budget assumes that the state will devote at least 26% of its budget to poverty alleviation.

This does not include other funding which may be necessary for infrastructure and job creation/economic growth.

Something close to China and much of Asia’s 40% of their budgets for a combination of economic growth and poverty alleviation.

This would be a far cry from the present 90% of budget for salaries and allowances as at present.

Such a vast differentiation between the present and the future would require political determination and firm country resolution to rein in its extravagance.

  • Chung was a secondary school teacher in the townships; lecturer in polytechnics and university; teacher trainer in the liberation struggle, civil servant and UN civil servant. These weekly New Horizon articles are coordinated by Lovemore Kadenge, an independent consultant, past president of the Zimbabwe Economics Society  and past president of the Institute of Chartered Secretaries and Administrators in Zimbabwe. Email: kadenge.zes@gmail.com/ cell: +263 772 382 852

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