By Daniel
Chigundu
FORMER finance
Minister Tendai Biti has said the lack of confidence and trust in the country has
driven the economy into auto cruise mode.
Biti
said the only possible solution that can take the country out of the situation
was through moving towards building and restoration of the lost trust.
“If
the wage bill is now 110 percent of total expenditure, self evidently there is
no fiscal leg room to finance social services and public sector infrastructural
programs. The truth of the matter is that the economy is on auto cruise to a
melt down and fast.
“Economic
fundamentals do not change dramatically within the space of three months. What
has altered is confidence and trust. A trust deficit has emerged and with it
all the things that happen in low trust high cost economy.
“The
starting point is therefore not one of money or some dubious ill written
policy. It has to be the building of, and restoration of trust and confidence.
“Speeches
alone will not be sufficient but bold actions that will deal with issues of
transparency, bilateral aid, foreign direct investment and the issue of the
disproportionate wage bill,” Biti said.
Speaking
on the delayed budget presentation Biti said it is wrong economics to assume
that there is a Santa Claus out there who will fork out the billions of dollars
that are required for a budget, arguing that
one must work with what is available, which he said is a lot of money were
it to be well managed.
“…credit
has a correlation with the debit that is the golden rule of accounting. As
every accountant student or teacher knows out there, you give to the right what
you take from the left. Some would prefer to call it “you eat what you kill”.
“So
budget presentation cannot be delayed because of hope or ambition. The bad
signals being send by delayed budget are just not worth the delay.
“Hard
decisions must be made particularly on the expenditure side. There is too much
hubris being carried which if boldly addressed can save a lot of millions,” he
said.
Zimbabwe
is experiencing a sluggish economic situation driven by such challenges as
erratic power supplies, liquidity constrains and depressed capacity utilisation
of 40 percent which continue to adversely affect the economy.
The
Zimbabwe Revenue Authority (Zimra) last month published its third quarter (Q3) revenue
collection performance in which it collected US$897.3 million against a target
of US$904.9 million representing a negative variance of 0.84 percent.
This
became the second consecutive negative variance after the six percent miss
recorded in the second quarter (Q2).
In
its weekly market watch surveys seasoned market watchers Tetrad Securities said
the revenue collections by Zimra serves to highlight the difficult situations
obtaining in the country and that if it continues it will create deficits that
might bring headaches.
“Zimra’s
Q3 report mirrors the slowdown in the economy. The revised revenue target of
US$3.91 billion for 2013 according to the Mid-term Fiscal policy may be
difficult to attain. This is so because we expect the current subdued
environment to persist for the remainder of the year. More so, Zimra has only
managed to report a positive variance of 5 percent in Q1 whereas for Q2 and
Q3had negative variances of 6 percent and 0.84 percent respectively.
“Unless
there are other sources of revenues for the government the 2013 revenue target
seems unachievable. With government revenues expected to be below target we
foresee the government failing to maintain its “eat what you kill” policy as
government expenditure is not declining and not expected to decline anytime
soon.
“For
an already cash strapped government, low revenues may create deficits that may
be difficult to fund especially given the fact that we are not using our own
currency.
“The little contribution coming from mining
royalties is also worrying. There is need for government to increase
transparency on how mining revenues are accounted for especially on diamonds.
This is also the same view shared by IMF,” Tetrad said.-
No comments:
Post a Comment