adminOliver Kazunga Senior Business Reporter
THE Zimbabwe National Chamber of Commerce (ZNCC) met in Bulawayo yesterday and crafted a number of proposals to be factored in the 2015 national budget.
Speaking during the pre-budget consultative meeting, ZNCC chief economist Kipson Gundani said businesses expected the government to come up with a concrete fiscal policy statement that will arrest the country’s economic challenges.
The fiscal policy statement is due for presentation in November.
During discussions, participants roundly agreed urgent measures were needed in tackling Zimbabwe’s current account deficit, incentivising contract farming to boost output and establishing smart protection initiatives for the manufacturing sector.
Herry Heresy from Ecobank said value addition and beneficiation on Zimbabwe resources should be speeded up to reduce the trade deficit.
“Zimbabwe has always had a negatitive trade deficit. But why has it become a topical issue at the moment? It’s because of the huge negative deficit of $2,52 billion.
“Why is Zimbabwe finding itself cutting a shirt more than a cloth it has? We’re exporting primary products. I’m talking of unprocessed platinum, diamonds and tobacco. Lack of value addition is contributing to poor exports,” he said.
Economist Christopher Mugaga said the bulk of the government’s revenue was spent on salaries and urged Finance Minister Patrick Chinamasa to come up with ways of balancing government expenditure.
“Issues to do with corruption in the economy also need to be addressed to attract foreign direct investment. The minister should also consider cutting interest rates on borrowing to promote revival of the manufacturing sector.
“Companies are borrowing at high interest rates making them uncompetitive in the face of competition from imports,” said another participant.
The meeting proposed that the 2015 budget should prioritise production of alternatives to imports to cushion ordinary people from taxation.
Following the liberalisation of the economy in 2009, the country has not been registering meaningful economic growth due to constraints such as the liquidity crisis and lack of foreign direct investment.
Online Reporter