Zimbabwe budget aims to end economic isolation

Finance Minister Patrick Chinamasa
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The new government of Zimbabwe has presented its first budget statement, which aims to end the country’s economic isolation.

By Simone Rensch

Finance minister Patrick

Chinamasa revealed his 2018 national budget on 7 December. It included spending cuts to reduce the national fiscal deficit to 3.5% of gross domestic product, from an estimated 9.4% in 2016.

The budget focuses on “consolidating the fiscus in order to restore and maintain macroeconomic stability”, Chinamasa said.

He said: “The budget deficit for 2018, given total revenue available for appropriation by parliament of $5,071bn, and total expenditure and net lending of £5,743bn, translate to a fiscal deficit of $672m.”

Civil servants over the age of 65 would have to retire, as more than 90% of government expenditure goes to pay civil service salaries.  However, the minister did confirm that civil servants would get bonuses for 2017.

The wage bill for 2018 is set at £3.3bn, about 57% of the total budget.

Chinamasa said: “The 2018 budget is appropriating $3.3bn for employment costs, with $2.6bn being set aside for the public service wage bill, inclusive of grant.”

The newly appointed president Emmerson Mnangagwa has pledged the Zimbabwe government will seek to revive the collapsed economy and put an end to corruption.

He also offered a three-month amnesty for individuals and companies to bring back public funds stashes illegally abroad.

Commentators have suggested that Zimbabwe’s economic recovery will be difficult, despite the resignation of president Robert Mugabe.

Judith Tyson, a research fellow at the Overseas Development Institute, told PF that the country needs a period of political certainty to get its finances back on track.

Mugabe resigned after 37 years in power following pressure from the public, the army and his party for him to step down.