Treasury’s tough balancing act

Business Reporter

Business leaders and captains of industry expect the 2024 mid-term Budget review, set to be presented today, to contain measures that further entrench the free market economy, foster exchange rate stability and promote the wider use of the domestic currency in transactions.

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube will present the review of this year’s expenditure plan, which must balance competing interests, including driving economic growth, maintaining stability, and cushioning vulnerable citizens following a devastating El Nino-induced drought.

Zimbabwe National Chamber of Commerce president, Mr Tapiwa Karoro, said the Government should address critical issues impacting the business environment and the economy at large. He emphasised the need to embrace market forces for exchange rate stability, entrenching the use of the local currency and would like to see reduction of the Intermediated Money Transfer Tax on local currency transactions.

Mr Karoro also called for realistic and adequate Budget allocations for Government ministries, departments and agencies as well as clarity on the funding framework for ongoing long-term Government programmes.

He stressed the importance of prioritising debt arrears clearance to unlock new funding lines and ensuring effective border management to reduce financial                                                    leakages.

Financial markets analyst Mr George Nhepera said the market expects a mid-term Budget review that complements monetary policy in creating demand for the local currency through taxes, leading to currency stability.

He emphasised the need for the Ministry of Finance to support the ZiG currency.

Economist Mr Persistence Gwanyanya, a member of the Reserve Bank of Zimbabwe’s Monetary Policy Committee, said the fiscus faces pressure from drought and softening commodity prices.

He expects the mid-term Budget review to have additional measures to promote judicious management of the Budget, support stability and underwrite the local currency through measures such as quarterly payment dates for taxes.