gtag('config', 'UA-12595121-1'); ‘Chinamasa fiscal review an admission of failure’ – The Zimbabwe Mail

‘Chinamasa fiscal review an admission of failure’

Acting Finance Minister Patrick Chinamasa
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HARARE – Finance minister Patrick Chinamasa’s mid-term fiscal policy review is “empty” and an “insult” to long-suffering Zimbabweans, which proves an admission of leadership failure, opposition parties said.

Presenting his half year fiscal review in Parliament last week, the Treasury chief highlighted that government’s expenditure on foreign trips and salaries for the bloated civil service was gobbling over 90 percent of the $4 billion annual national budget.

The trend, Chinamasa said, would soon see government considering rationalising and cutting foreign travel costs and maintain a civil service recruitment and wage freeze, as part of measures to reduce costs.

In reaction, MDC shadow Finance minister Tapiwa Mashakada said government was being haunted by its politically-motivated reluctance to address the issue of ghost workers exposed by an extensive audit six years ago.

He said the ghost workers have led to employment costs ballooning to $3,2 billion, chewing the $ 3,5 billion revenue collected in 2016.

“Frankly speaking, Chinamasa’s…review showed that government is going round in circles,” Mashakada said, adding that it was also because Zanu PF officials had abandoned their government business to concentrate on their battles to succeed 93-year-old President Robert Mugabe.

“It is unthinkable that in 2016 the budget deficit rose to $1,4 billion against an original target of $150 million,” Mashakada said.

“This shows government’s appetite to spend. Obviously the many trips abroad by the president and his Cabinet have contributed to this hike in the budget deficit, yet it committed less than $100 million towards infrastructural development, but paid $120 million interest on debt in 2016.”

The former Economic planning minister said the profligacy is the reason why government is now failing to service the $601 million African Development Bank debt and the $ 1,2 billion  World Bank debt.

He said although GDP growth is estimated to increase from 0,7 percent in 2016 to 3,7 percent in 2017, “it remains a moot question as to the source of that growth”.

Mashakada said the agricultural sector rebound alone, though necessary, is however, not sufficient enough to create that exponentially high growth.

He said it was shocking that in 2016 the mining sector only contributed 2, 2 percent of the total revenues collected when government is failing to account for the disappearance of $50 billion from the diamond sector.

Mashakada also slammed Chinamasa for failing to speak against corruption, and accused government of being “clueless” on how to stimulate production and economic growth.

“The review skirted the issue of corruption. The word was never mentioned. Not even once yet the country is infested by the corruption cancer,” he said, adding “nothing was mentioned about domestic and foreign direct investment performance”.

“We were also surprised that the Minister did not make policy pronouncements on the current cash shortages and liquidity crunch which is threatening the recovery of the economy”.

On the other hand, former Finance minister Tendai Biti’s People’s Democratic Party (PDP) called on Chinamasa to resign saying his review was  “an unsolicited guilty plea entered before the accusations of mediocrity and habitual dereliction of duty are pressed”.

PDP spokesperson Jacob Mafume said the Finance minister had redefined government’s failure to respond to the challenges the economy is facing.

He said the fact that the budget deficit is widening is a cause for concern as it has potential to cause fiscal implosion.

“A debt crisis is also brewing, a conformation of a debt over hang amounting to US$11,3 billion with the external debt at 7,3 billion and domestic debt reaching 4 billion is also a cause for concern,” Mafume said.

He added that part of the 73 percent external debt owed by central government includes half a billion assumed by government from the RBZ which reflects dangers that quasi-fiscal activities pose on an economy.

“What is irking to us is not only the inability to deal with the structural challenges, but more importantly the man-made problems which are Chinamasa’s entire making.

“His biggest mistakes were to act clever and depart from the fiscal discipline of the Government of National Unity,” he said.

The PDP accused Chinamasa of raiding the Reserve Bank of Zimbabwe to fund the deficit, a move that worsened the crisis with a crippling liquidity crunch ensuing as a result.

“We have made this point consistently that the banking crisis is a result of government’s raid of nostro accounts and RTGS balances at the central bank,” Mafume alleged.