Mthuli Ncube’s Mid-Term Budget Fictitious – Biti

FORMER Finance Minister Tendai Biti has ripped into current Treasury boss, Mthuli Ncube’s 2020 Mid Term Budget Review statement describing it as a fictitious damp squib.

Ncube presented his Mid-Term budget in Parliament Thursday.

However, experts have dismissed the review statement saying Ncube had missed a golden opportunity to save an ailing economy and in the process had paved the way for harder times ahead for ordinary Zimbabweans.

Biti, who is also MDC Alliance Vice President, said failure by Ncube to bring in a supplementary budget was deceptive and highlighted that last month’s new wage allowances for civil servants and the recently unveiled $18.2 billion Covid-19 rescue package’s sources of funding needed to be established.

“Instead, it was a tale of self-serving glorification and mendacious projections setting minus 4.5 % GDP projection for 2020 which is fictitious. A V-shaped recovery leading to a 7% growth in 2021 and the claimed budget surplus of $800m ignores the impact of inflation on revenue and underfunding of projects,” he said.

“Any doubt about the limitations, failure, and cluelessness of the regime would have been dispelled by the regime’s vacuous and insipid Mid-Term Fiscal Review. What a morbid act of uninspiring rubble. A rubble damp squib if ever there was one.

“The failure to bring in a supplementary budget was deception at its best. Last month’s new wage allowances need funding, so is the $18.2 billion Covid-19 package. Ignoring the closures of the ZSE (Zimbabwe Stock Exchange) and Ecocash was criminal. So to the failure to address distortions in markets (tobacco and cotton).”

Speaking to Friday, economist Prosper Chitambara said Ncube had not changed his austerity rhetoric as reflected in the budget review.

“The austerity framework is seen in the extension of the 2% tax towards foreign currency transactions and poor allocations towards welfare expenditure,” he said.

Chitambara noted the Health Ministry’s expenditure towards Covid-19 for the first half of 2020 which stood at $739 million is lower than US$27 million disbursed by development partners towards the pandemic during the same period.

He said this shows the government was only concerned with balancing its books while dumping its core social responsibilities to development partners.

“Expenditures surprisingly remain highly consumptive with 66 % going towards recurrent needs. Our capital expenditure at $9.3 billion was way lower than the targeted $10.7 billion signifying there could be some missed targets,” he said.

He predicted that life was going to be tougher for ordinary citizens.

Zimbabwe National Chamber of Commerce (ZNCC) past president, Devine Ndhlukula said the budget review sidelined the plight of the working poor.

She said the raising of the tax-free threshold up to ZWL$5 000 does not do much in a hyper-inflationary environment considering that lowly paid people like security guards were already earning salaries around that figure.

“We are not very pleased with this review,” she said.