The Sunday Mail
The efficacy of the National Budget in fostering the envisaged sustainable socio-economic transformation lies not in the thickness of the document or the amount of graphs therein.
It lies in the budget’s ability to identify and articulate the main challenges of the day.
The final nail is, of course, the strength of the solutions identified in dealing with the problems laid bare.
However, in this dynamic world, things don’t always go as planned.
Problems may deteriorate and solutions may debilitate.
Which is why the Mid-Term Fiscal Policy Review is very crucial as it comes to evaluate whether the budget is treading in the right trajectory or not and take corrective actions to keep it on course.
Which is also why last Thursday was a very important day, which succeeded in diverting people’s attention from one dead lion called Cecil.
In presenting the Mid-Term Fiscal Policy Statement, Finance and Economic Development Minister Patrick Chinamasa took the opportunity to prove that austerity is still our better devil.
Unlike the Cecil-slayer Walter Palmer, who used a bow and arrow to kill this beast, Minister Chinamasa used a machete to slash the budget.
He slashed revenue projection by US$390 million then slashed projected expenditure by US$115 million.
This confirms just how the liquidity condition remain precarious.
Which is why some of us also did not expect the fiscal policy review’s interventions to be money-consuming ones. It was a policy-based budget review as some of us anticipated.
Guess what folks; Priscilla Misihairambwi-Mushonga must be a very happy woman following the show she pulled in Parliament not many days ago, at the expense of being ejected from the august House.
The legislator brought to Parliament a plastic bag full of second-hand underwear sold in the streets.
She paraded them to Minister Chinamasa and all the legislators in attendance, much to their amazement.
It’s not everyday that underwear are unfurled and displayed in Parliament.
She might as well have made history by being the first legislator to showcase underwear in Parliament!
The point she wanted to make, don’t get lost, was that second-hand underwear should not be allowed into the country as they pose a health threat to women.
She was later ejected from Parliament, not for the above, but for some altercation she had with Justice Mayor Wadyajena whom she threatened to beat, and even went to the extent of crossing the floor.
But Minister Chinamasa had taken note.
He did more than what she asked for. ln his budget review statement, the minister banned the importation of second-hand clothing and shoes, admitting that they “present a health hazard to the citizens, since the goods may be imported without proper fumigation”.
This embargo on second-hand apparel reminds me of the point I made in last week’s piece – that labour is a derived demand and that we have to create additional demand for locally-produced goods as a means to create more jobs.
I even gave an example of clothing, and pointed out that if we want to employ more tailors, we have to first increase demand for locally-produced clothes.
I further argued that the budget review should strive to boost domestic demand.
And it did not disappoint.
You see, by banning the importation of second-hand clothing, putting tariffs on new clothing importation and empowering clothing manufacturers to import raw materials they need under favourable terms, you would have shifted demand for foreign products to local ones.
And with Matabeleland having already been identified as a Special Economic Zone for textiles, this move, therefore, comes at an opportune time.
Players in the textiles sector can now produce goods with a guaranteed market.
It’s only a matter of time and I guess Ms Priscilla Misihairambwi-Mushonga will once again take a whole plastic bag of new proudly Zimbabwean underwear to Parliament!
Minister Chinamasa also protected other manufacturing sub-sectors such as pharmaceuticals, fertilisers, beverages and oil expressers among others.
What a timely gift to the captains of industry who were gathered for their annual congress in the Midlands on that very day.
Lucky enough, these industrialists were talking about unlocking manufacturing competitiveness, which makes them quite conversant with what I am about to say.
Now the protected sectors have the chance to increase their production capacities.
They must, however, be reminded of my popular hymn; that protection without a palpable plan to become competitive is futile.
I am glad that fertiliser manufacturers have already pledged to cut down their prices by 20 percent, in return for the 25 percent tariff protection gift.
This is the way to go.
It is the ideal recipe to creating jobs, too.
The minister reiterated in his fiscal policy review that the 2015 National Budget was designed to reinforce Zim-Asset as the basis for laying a solid foundation for accelerated growth “and the creation of employment opportunities”.
This economy needs jobs, more jobs in both the public and private sectors.
Which is why I am quite sceptical about Government’s intention to cut the wage bill by a substantial 35 percent in order to create fiscal space for developmental projects.
Granted – this would be achieved through measures such as removal of duplicating and overlapping activities, streamlining roles and functions of institutions, cutting budgetary allocations to departments with the potential to generate own resources. But will that be sufficient to arrive at 35 percent?
We don’t want to achieve this “quantitative benchmark” by cutting jobs unnecessarily just to please those who gave us the Staff Monitored Programme (SMP) monster.
We should learn to discern good austerity from bad austerity.
President Mugabe recently talked about the need to protect jobs.
“We do no want to see people on the streets, and do not like people being fired from work,” he said.
You see, the public sector is already understaffed and even if we are to succeed in identifying any duplications, the pragmatic thing to do would be to replace them with new critical skills needed in other areas.
Our budget is already a mickey-mouse.
Even if we were to commit all the current salary budget towards capital expenditure projects right up to 2018, we still won’t be able to meet the US$27 billion funding requirement of Zim-Asset.
The solution, therefore, lies in doing all we can to attract foreign investment and striving to acquire concessionary loans. Cutting down on labour, which is a key factor of production, apparently under the guise of meeting the SMP’s structural benchmarks, will only make it difficult for us to accelerate Zim-Asset implementation.
It will also kill spending power and frustrate our relentless pursuit to enhance domestic demand.
And lastly, shouldn’t America pay us chema (condolence token) for brutally killing our dear Cecil, the lion?
How about at least removing the economic sanctions it imposed on Zimbabwe, as a gesture of remorse!
