Dr Makoni disapproves of 2015 Zim budget

By Farai Dauramanzi

The leader of Mavambo/Kusile/Dawn (MKD) held a press conference on Friday 28 November 2014 in which he criticised the 2015 budget that was presented by the Minister of Finance Patrick Chinamasa.

The 2015 National Budget Statement

In the press conference which was held at his offices in Harare and titled Lots of Sound Bites, – No Content, the former finance minister said that the Minister of Finance failed to come up with solutions to address the current economic crunch.

“This year’s statement lacks sound rigorous analysis. I am sure the professionals in the ministry and other departments of government, RBZ and ZEPARU, are capable of providing such analysis. But I assume such analysis would be considered politically incorrect and unacceptable, especially in the week before the (Zanu-PF) elective congress,” said Dr. Makoni.

The MKD leader accused Chinamasa of using attractive sound bites without giving any elaboration and proposals or measures on how to realise the expected economic growth.

“The brief analyses he made, and the numbers he presented point to worsening conditions. Revenue performance in this current year will be lower than budgeted, and the economy is in deflation, yet he proposes higher expenditure next year,” commented Dr. Makoni.

Dr Makoni noted that the Finance Minister estimates a GDP growth of 3.1% this year, and projects it at 3.2% next year but, said that he does not explain what the source(s) of that growth will be.

“At the same time, he predicts slowdown in all sectors, especially agriculture and mining. These were the anchors of his projected 6.1% growth this time last year; which he subsequently reduced to 3.1%. He proposes to spend $4.15 billion, 81% of it in employment costs, 11% in operations and maintenance and 8% in capital expenditure. He makes this confounding admission (that) we are paying people to sit in offices” explained Dr Makoni.

The MKD leader who is highly regarded by many on fiscal issues due to his policies during his tenure as finance minister in the 90’s said that one painful aspect of the employment costs is that government was paying huge amounts to “ghost workers”.

“A government HR audit about 2 years ago revealed that up to 39% of civil servants do not exist. Yet, their emoluments are included in the huge and growing employment costs. Remember last year, Minister Chinamasa estimated that employment costs would chew up 75% of the government budget; this year it’s up to 81%,” said Dr Makoni.

“The table on company closures 4,610 and job losses 55,443 is a welcome confirmation of the economic implosion. However, as with other areas, the minister gives no proposal or plan for mitigating the catastrophe,” added Dr. Makoni.

Dr. Makoni highlighted that the minister’s statement on indigenisation further confused, rather than clarifying the matter.

“There is need for clear public guidelines and parameters for local and foreign investors to apply. The minister haughtily announced that he would present a raft of measures to stimulate the economy. He then proceeded to give a litany of 12 month extensions of peripheral duty rebates.  One analyst called that majoring on minors or focusing on micro issues,” said Dr Makoni.

The MKD leader also said that it is noteworthy that the minister did not announce any allocations to line ministries apart from the $252 million that was allocated to the Presidential Input Scheme, “It must be the first time that a budget has been presented without announcing the allocations to the different ministries.”

Dr. Makoni concluded his presentation by saying that his sense is that the minister was not ready for the budget and that the statement was incoherent, and in some respect, even contradictory, “He was rushed to meet a date, and just net through the motion.”

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