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Business Reporter —
INDUSTRY representative bodies the Confederation of Zimbabwe Industries (CZI) and the Zimbabwe National Chamber of Commerce (ZNCC) believe Government has to cut its recurrent expenditure, improve the business environment and allocate more resources into agriculture and manufacturing in the 2017 National Budget.
Reducing recurrent expenditures from the current 97 percent of revenues is envisaged to narrow the budget deficit and free up more resources for capital expenditure, which stimulates economic growth. Also, the revival of agriculture and manufacturing is expected to significantly slash the country’s import bill.
It is estimated that the country spent more than US$115 million on maize imports last year. Imports have also continued this year. Public hearings for the 2017 National Budget, which are held in line with Section 141 sub-section (a) of the Constitution, began in September and are currently ongoing.
ZNCC president Mr Davison Norupiri told The Sunday Mail Business last week that both research and consultations were key in coming up with a cogent budget framework. Policy reversals and delays are understood to be causing “unnecessary anxiety” and eroding business confidence.
“There is need to adopt a balanced budget with clearly justified revenue sources and expenditures. There is therefore an urgent need to reduce the size of Government and the civil service wage bill. “Some ministries can be merged, the ghost worker issue brought to finality. . .
“Government should consider reducing the tax rate and alleviate the burden as Zimbabweans are among the most taxed people, more so, when the tax rate is looked at in conjunction with the high cost of doing business,” said Mr Norupiri.
He further noted that while Government had been actively promoting the use of plastic money, most Government departments have not embraced point of sale (POS) machines.
In addition, ZNCC believes Government needs to partner the private sector in wooing investors. Industry is also pushing Government to heighten efforts to either privatise or find strategic partners for loss-making parastatals such as Ziscosteel, the National Railways of Zimbabwe (NRZ) and Air Zimbabwe.
The state entities, which are considered to be key economic enablers, continue to be a drag on the fiscus. The Office of the President and Cabinet (OPC) is in the process of instituting far-reaching reforms that are meant to improve the doing business environment.
According to the ZNCC, the central bank has to be tact in the way it deals with the obtaining cash crunch.
“Commercial banks should import smaller denominations such as US$1, US$5 and US$10 notes instead US$100 dollar notes which can be easily siphoned out of the country.
“There is need for reassurance that bond notes will not be forced on economic agents when they make withdrawals from their bank accounts. The multiple currency should be allowed to continue unimpeded,” explained Mr Norupiri.
CZI vice president Mr Sifelani Jabangwe said although industry was still collating its views and ideas, the overwhelming view was that agriculture and manufacturing need to be prioritised.
“Our views are that Zimbabwe is an agro-based economy and we have seen millions of dollars being deployed in the importation of grain, but if we stimulate agriculture, the millions of dollars will be targeted to other sectors of the economy such as manufacturing.
“If all these programmes (targeted command agriculture scheme and contract farming) are properly carried out, the sector will certainly stimulate growth in the manufacturing sector which depends on agriculture products.
“This can be a timely boost for the Statutory Instrument (SI) 64 lined companies as raw materials will be readily available,” he said.
The 2017 National Budget will be presented to the market soon.
Online Reporter