Key takeaways from Mthuli Ncube’s play-it-safe budget review
Finance minister Mthuli Ncube played it safe in his mid-term budget review statement on Thursday, making no major policy decisions and saying he may not need additional funding for his 2021 budget.
After many previous policy shocks, the best part about a largely uneventful budget statement was exactly that; it was uneventful. There were no major announcements on taxation, the currency, or any measures likely to shake tables immediately.
“There is need to stay the course. There are no policy changes; I believe the existing policies are achieving the desired results are still adequate,” Ncube said. If any big budget changes are to made, those would come in the 2022 budget, he said.
Here is a summary of some of the main takeaways from Ncube’s statement:
Economic Growth: More ambitious target set
Ncube’s prediction of 7.4% growth for 2021 was already ambitious, so much that even President Emmerson Mnangagwa thought it must be revised downwards. But Ncube is even more confident. He now sees the economy growing by 7.8%, higher than his initial expectation of 7.4%.
His predictions are far higher than the IMF’s projection of 6% and the World Bank’s 3.9% forecast. They also contrast sentiment from major local companies, many of which are tempering their confidence of a rebound with caution over the likely impact of COVID-19.
Why is Ncube so confident? He cites “rainfall season, higher international commodity prices, stable macroeconomic environment and a managed COVID-19 pandemic.”
Ncube says agriculture will this year grow faster than expected. It will grow by 34%, higher than the initially predicted 11%. He bases this on output from key farm segments, such as maize production.
The finance minister is also counting on the base effect of GDP contraction in 2020, when the economy shrank by 4%. For 2022, Ncube expects the economy to expand by 5.4%
He sees year-on-year inflation slowing down to between 22% and 35% by December 2021.
Vaccine procurement: More spending needed
Ncube said COVID-19 vaccines that have been bought so far have been purchased “utilising the savings from last year, in the main.”
But, to achieve Zimbabwe’s target of 60% of the population, the vaccination campaign will require “mobilisation of additional resources for the procurement of more vaccines, over and above the US$100m resource envelope.”
Ncube laid out what he has spent so far on the programme. To date, 11.8m doses and 7.2m syringes have been purchased using US$93.2 million.
No extra budget needed, for now
Ncube has stayed away from asking for more money from Parliament. Unless there is a major shock, he says, there will be no need for a supplementary budget this year.
He said: “In the outlook to December 2021, expenditure target of ZWL$421.6 billion will be maintained assuming continued containment of expenditures, save for exigencies managed through reallocations, where necessary.”
So far this year, the Government has managed to live within its means. The government raised an estimated Z$198.2 billion in revenues between January and June and spent Z$197.6 billion.
Diaspora’s support for economy keeps growing
During the first six months of the year, Zimbabweans living abroad sent home a total of US$746.9 million. Over the same time last year, they sent US$288.7 million. Remittances are projected to reach US$1.3 billion by year end, Ncube said.
The contribution of Diaspora remittances to the economy is growing.
“Diaspora remittances and other transfers, which constitute the secondary income account, are projected to continue driving the current account balance as was the case in 2020. Personal transfers from Zimbabweans in the Diaspora are expected to remain steady and resilient as the economies in key source markets recover from the Covid-19 induced slow-down, allowing them invest in assets back home.”
Sold: Gold refinery
In December, Ncube announced that the government was privatising Fidelity Printers and Refineries. This is the company that refines and exports gold. Gold producers would control 60% of Fidelity, with central bank keeping 40%.
Ncube has now announced that this deal is now done. Ten miners have agreed to buy the 60% for US$49 million. This will be the first time that the refinery will be in private hands since it was established in 1988.
While Ncube did not name the ten miners, a structure announced last year said participation would be based on average gold sales over the previous three years. This means among the potential will be the biggest gold producers, such as Kuvimba’s Freda Rebecca, which is now the number one producer, as well as Caledonia Mining, which runs Blanket, and RioZim. – newZwire
Binga man brutally murders mother over witchcraft allegations
BY NOKUTHABA DLAMINI
Kamativi police has arrested a 34 -year – old Binga man who axed his mother to death after accusing her of practicing witchcraft.
Police in a statement confirmed arresting Sumayili Juma off Simbala Village in Binga for a crime that he committed on Tuesday.
The accused allegedly struck his mother on the head and shoulders, killing her instantly at the family’s homestead.
“Police in Kamativi have arrested Sumayili Juma (34) in connection with a case of murder which occurred on 21/03/23 at Kilima 19, Simbala Village, Binga,” police said.
“The suspect struck his mother with an axe on both shoulders and head after accusing her of witchcraft.”
Meanwhile on Sunday, police in Gwelutshena station in Nkayi arrested Prosper Ncube (33) for a murder case in which he allegedly struck Polite Hlabangani on the abdomen with a brick after a misunderstanding during a gambling game at Gwelutshena shopping centre on January 27.
The victim died upon admission at Nkayi District Hospital and since then, the accused had been on the run.
Malawi floods disaster, Zimbabwean government steps in to offer aid
BY BRENDA NCUBE
Zimbabwe has formed a Disaster Relief Committee to assist the government of Malawi following Cyclone Freddy storm that claimed over 400 and caused extensive damage to homes and social services infrastructure.
The pledge, at it’s final craft plans, was presided over by president Emmerson Mnangagwa on Tuesday while Local Government and Public Works ministry was mandated to lead the lobby.
In the aftermath of the storm, thousands of victims suffered injury and displacement, while the affected areas were rendered impassable.
“In response to the appeal for assistance by Malawian President His Excellency Lazarus Chakwera to his fellow SADC Heads of State and Government, Cabinet has constituted a Disaster Relief Committee led by the Minister of Local Government and Public Works to draw up a comprehensive assistance package for disaster-stricken Malawi, ” post cabinet minutes read.
“The Committee will liaise with the Government of Malawi on modalities for conveying the relief package.”
Cabinet directed that the mobilization of relief assistance should commence immediately and include 10 000 metric tonnes of mealie meal; cooking oil; blankets; clothing; construction material for cabins; sanitisers, detergents, bath soaps, stationery and other learning materials.
“To widen the scope of donations to Malawi, the government is encouraging the private sector, national institutions and citizens to donate generously to this worthy cause.”
According to the United Nations Office of Humanitarian Affairs, the devastating toll of the floods in Malawi has continued to rise, with at least 438 deaths reported, 918 people injured and 282 missing as of March 17.
The report says that nearly 345 200 people, almost half of them being children, were displaced and sheltered in over 500 camps across flood affected areas, where the risk of cholera in overcrowded camps is high. The Malawian government’ search and rescue operations have continued with more than 1,000 people evacuated by 17 March.
A report by the United Nations Satellite Centre indicated that in an area of 5,000 km² flood waters had increased by about 60km² between March 14 and 17.
Zimbabwe doubles civil service salaries ahead of polls
BY NYASHA CHINGONO
Zimbabwe’s government has offered public sector workers including teachers a 100% salary increase, as President Emmerson Mnangagwa moves to pacify a restive civil servants reeling from soaring costs of living ahead of crucial polls this year.
The salary increments announced by Treasury come amid plans by underpaid teachers to go on strike to demand higher pay.
The salary increments means a teacher currently earning an average of 40,000 Zimbabwe dollar ($43.72) a month, will now get about 80,000 Zimbabwe dollar ($87.44).
The U.S. dollar monthly allowance the government pays its workers will also increase from $200 to $250, while teachers will get an additional $80 teaching allowance a month.The salary increments will be backdated to Feb. 1, according to a letter from Treasury to the Public Service Commission dated March 15 and seen by Reuters on Tuesday.
But teachers are unhappy with the offer.
“The quantum of the increase is not in sync with the realities of life in Zimbabwe. Teachers remain poor,” Amalgamated Rural Teachers Union of Zimbabwe leader Obert Masaraure told Reuters.
Masaraure said the union had consulted its members and they were pressing ahead with plans to strike. He did not say when the strike action would begin.
The country’s blended inflation for February stood at 92.3% year-on-year compared to 101.5% in January, after Zimbabwe adopted a measure inflation using a weighted average of items priced in Zimbabwean dollars and U.S. dollars.
Zimbabweans this year will vote for a new president at a yet to be announced date, and Mnangagwa will be looking to attract the civil service vote from the opposition which is largely viewed as pro-labour.
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