FINANCE minister Patrick Chinamas needs to address the country’s budget deficit and restore investor confidence if significant changes in the economy are to be realised, economic analysts have said.
Chinamasa presents the country’s first post-Mugabe budget this Thursday afternoon with the country and investment community eager to see indicators of the direction of economic travel under new president Emmerson Mnangagwa.
Predecessor and now opposition leader Tendai Biti said the current budget deficit is unsustainable for a country which is aspiring for economic growth. He said it was sad that previous budgets have consistently failed to address the problem.
“The fault line in today’s budget will lie in the regime’s failure to reign in on the crippling budget deficit which is now 55 percent of the total expenditure.
“No Zanu regime can ever live within its means. Zimbabwe urgently needs to abandon deficit financing and move towards a balanced budget,” said Biti on Twitter account early Thursday.
The PDP leader, who used the mantra ‘eat what you kill during’ his term as finance minister, has been one of the leading critics of Chinamasa’s fiscal policies.
“Chinamasa has presided over worst fiscal crises that this economy has ever seen financing his huge budget deficit has created massive distortions including cash shortages, inflation, multiple exchange rates and high interest rates. Hard to imagine how the problem can be the solution,” he said.
Biti also warned of the possibility of the return of the Zimbabwean dollar which was abandoned in 2009 after becoming virtually worthless due to hyperinflation.
“There is a real danger that the regime may reintroduce the Zim $,” he warned.
“The country is years away from having sufficient reserves to support a currency. Besides, once you dollarize, you can’t go back; it is a confidence issue.
“You can put up tanks against a seating President but you can’t put tanks against a non-performing economy.”
Meanwhile, Zimbabwe National Chamber of Commerce (ZNCC) chief executive Chris Mugaga said this year’s budget provides Chinamasa’s with an opportunity to disengage with the past and start on a new economic trajectory.
“It’s an opportunity for minister Chinamasa to break from the past because we are not going to see a shift in terms of the policy dynamics but it is in the implementation were the devil has been laying,” he said.
“The law of a $4 billion budget for a nation of around 13 million people, I think you can see there is potential for growth.
“The rate at which the informal sector has been growing is a clear testimony of that opportunity cost or what we are losing in terms of potential revenue.”