The Sunday Mail
Editor’s Brief
Victoria Ruzvidzo
On Thursday, Finance and Economic Development Minister Professor Mthuli Ncude laid out a Mid-Term review and Supplementary Budget that has been largely described as realistic and progressive on many fronts.
Of course, a few have described it otherwise but we are all aware that naysayers will always be with us.
But the minister and all stakeholders must always incline an ear to criticism with constructive intent and not the hot air that some of us tend to blow at the slightest opportunity.
Some are already saying the 4,6 percent revised growth target will not be achieved.
This gives negative energy.
Why can we not aim at achieving it and see what happens year end?
Indeed, there are a number of external and internal hurdles the economy must overcome.
Maintaining a positive growth trajectory will see us achieve our set objectives.
Limiting ourselves and aiming low presents the danger of underachieving even where we could have done better.
Psychology has it that situations often gravitate towards the targets or limits set so there is no harm in us aiming high.
Who would have thought a 7,8 percent figure achieved in 2021 would have been possible, under Covid-19 when the entire globe was stuttering?
But the positivity and die-hard spirit demonstrated by most of the stakeholders made it happen.
The Government was confident, private sector was upbeat and this combined to produce the high GDP growth figure regardless of circumstances.
This is the spirit we should all embrace, of course, giving particular attention and practicing caution where need be.
In this instance, a quick one is the rising rate of inflation. The three-digit figure that is upon us is not exciting at all. It needs to be attended to expeditiously.
The 256,9 percent figure for July is certainly cause for concern.
There are local and external forces pushing inflation as alluded to by Prof Ncube.
But steps can be taken to tame the scourge. It is the ulcer afflicting the economy that must be dealt with before it becomes septic. It can be done and it must be done.
We commend Prof Ncube for boldly stating the situation on the ground and remaining resolute the economy will peak again.
His presentation on Thursday was certainly not an exercise in futility.
Budgets are primarily designed to allocate finite resources. They are designed to give parameters within which to operate. This is typical in both corporate and national structures.
Without budgets, entities would be flying blind. It so often happens that they have to be periodically reviewed, evaluated and accordingly adjusted so that they remain relevant and resonate with realities on the ground.
It is in this vein that the Finance Minister’s presentation was important to assess the recalibration needed and the budgetary direction which informs our fundamentals and operating environment.
Budgets are premised on projections, be they on expenditure or revenue, mutually dependent as they are. The whole idea is to make them close to the realities as much as possible otherwise their relevance diminishes.
The minister adjusted employment costs upwards by as much as 53 percent, which is positive in improving consumer confidence and stimulating demand.
The man on the street needs to know that he will have some money to spend, which in turn will support industries and business. There is much to be said about the symbiotic relation between consumers and business. They feed off each other and the ecosystem must constantly be nurtured.
Economic growth projections have been revised downwards to 4,6 percent from 5,5 percent.
It is encouraging to note that Prof Ncube portrayed a more realistic picture and is not like the proverbial ostrich, dipping its head in the sand.
He is in touch with obtaining circumstances where others are bent on painting glorified pictures, he took the bull by the horns and levelled it. This is always what it should be and inspires confidence. We all need to face reality, painful as it might be in some instances.
That the economic projection is still much higher than global projections and Africa’s is in itself a positive’ It reflects the resilience of our economy amidst a plethora of challenges. Economies are reeling from the deleterious effects of Covid-19, compounded by erratic rainfall patterns.
Worse still the Russia-Ukraine tiff. We are clearly in better stead than a significant number. That our growth continues is gratifying, coming as it does on the back of the challenges inherited by the Second republic.
By year end the country expects $7,3 billion in export earnings and imports of $8,1 billion.
Frankly, revenue streams have to improve and production must escalate. It is trite to note that when such a situation presents itself, either costs must go down or revenue increase. It is a difficult proposition to see how costs can be reduced, in view of the demands for salary increases from public servants.
It is thus important to ramp up production and productivity. We happily note the increase in capacity utilisation, the highest in decades.
That should not make us sit on our laurels. Much still has to be done in all the value chains.
We need to generate more foreign currency, which entails an increase in exports and import substitution among others. There is a crying need for capacity building still, we have noted the various Government interventions in that regard. The extent to which they are implemented will speak to their efficacy.
In every sphere, we need to up our game. Governments the world over can only provide a conducive environment, it is the citizenry which will determine the rest.
We equally note the increasing synchronicity between monetary and fiscal policies, this is precisely what it should be. The two cannot be at variance for sustainable progression.
lt is also not feasible to use USD as the mono-currency, for multiple reasons.
There is hardly any country which uses forex as a mono-currency for prolonged periods. It is simply untenable. Had we adopted USD only, our situation would have been far worse. So we have taken the gains we have made and we continue on the trajectory, even more invigorated and focused.
Naturally budgets are not well understood by some among the populace. Most of what is said is alien to them. This, therefore, points to a need for communication on this subject. People must be made to understand the thrust and implications.
Perhaps we could improve on the aspects for greater inclusivity and buy in. It equally inspires greater confidence. We all might equally appreciate that it is difficult to get complete consensus on anything. What we can do, however, is to ensure comprehension, which communication channels enable.
By and large, Prof Ncube’s Budget has many positives.
It reflects seriousness on the part of Government.
There are a lot of factors which bear on any economy, some of which might take a bit longer than anticipated.
We, however, work it still, given even greater impetus by the progress made thus far.
Our growth path is well made and we are well on course.
We work even harder to escalate it. In the end, the common man wants to understand how their circumstances are impacted on, we communicate it to them.
We also remain alive to the fact that production and productivity are the defining twin concepts as Government works on ensuring the right policies are in place.
Numerous life-transforming projects in mining, manufacturing, construction and other sectors are at various stages of implementation.
These include the Invictus oil and gas project in Muzarabani, the development of a US$60 billion new city in Mt Hampden.
All these point to a glorious future for Zimbabwe, a future that is within reach.
In God I Trust.
