1521: A number of public officials continue to be engaged in the public service well beyond their retirement age. In this regard, from January 2018 Government will, through the Service Commissions, retire staff above the age of 65. The staff that retire will be assisted with access to capital, to facilitate their meaningful contribution towards economic development, including taking advantage of allocated land, for those who are beneficiaries of the land reform programme. Furthermore, Government will also introduce a voluntary retirement scheme that serves to rationalise the public service wage bill, whilst providing financial incentives to beneficiaries to engage in economic activities in such areas as farming, and start-up of small business enterprises.
1519: It is paramount that the ‘New Economic Order’ judiciously adopts Fiscal Anchors, in order to instil and strengthen fiscal discipline for effectively improving Budget management and enhancing co-ordination of fiscal and monetary policies.
The Fiscal Anchors for the Budget relate to:
Fiscal Deficit Targeting, under which the Budget deficit for 2018 is halved to below 4% of GDP, and subsequently capping Budget deficits below 3%, in line with best practices and financing capacity of the economy;
Sustainable level of Public Debt to GDP, consistent with the Section 11(2) of the Public Debt Management Act [Chapter 22:21] which requires that the total outstanding Public and Publicly Guaranteed Debt as a ratio of GDP should not exceed 70% at the end of any fiscal year;
Ceiling of Government Borrowing from the Central Bank, in line with Section 11(1) of the Reserve Bank Act [Chapter 22:15], which requires that Reserve Bank lending to the State at any time shall not exceed 20% of the previous year’s Government revenues; and
Minimum Spending on Infrastructure, by re-directing substantial resources towards capital development priorities, through increasing the capital Budget thresholds from the current 11% to 15% in 2018 and 25% by 2020.
Progressive reduction of the share of Employment Costs in the Budget to initially 70% in 2018, 65% in 2019, and below 60% of total revenue by 2020, to create fiscal space to accommodate financing of the development Budget and operations of Government.
Central to adherence to the above Fiscal Anchors will be discipline and the political will to implement the necessary measures, avoiding arbitrary reversals to agreed Cabinet policy positions that entail pain and sacrifice
1516: Money creation, through domestic money market instruments which do not match with available foreign currency, only serves to weaken the value of the same instruments, translating into rapid build-up in inflationary pressures, to the detriment of financial and macro-economic stability. This has seen growing mis-matches between electronic money balances and the stock of real foreign exchange balances, as reflected by cash holdings and nostro balances of banks. The mis-match between the supply and demand for foreign exchange, has also led to the emergence of foreign exchange premiums in the market.
1514: The ‘New Economic Order’, therefore, gears towards restoring discipline, fostering a stronger culture of implementation, supported by political will in dealing with the following: correcting the Fiscal Imbalances and Financial Sector Vulnerabilities; Public Enterprises and Local Authorities Reform; Improving the unconducive Investment Environment; Dealing with Corruption in the Economy; Re-engagement with the International Community; Stimulating Production, and Exporting; Creation of Jobs, as well as a credible 2018 election
1510: The challenges facing the economy demand well thought-out, and focused, Government interventions for a much more rapid and sustained recovery path that delivers on jobs as envisaged and outlined in His Excellency President E.D. Mnangagwa’s Inaugural Address. The Recovery Measures towards a ‘New Economic Order’ usher a break away from policy inconsistencies, reversals and hesitations of the past, and signal a strong Business Unusual Approach.
1509: Revenue for the year will be $3.9 billion up from 3.5 billion realised last year. Expenditure will be $5.6 billion against the budgeted $4.1 billion. $2.9 billion are the borrowings for this year.
1506: Inflation will average 3% in 2017 and is expected to remain as such into 2018.
“Our economy has not been performing to its potential and to the expectations of the citizenry, as demonstrated by low production and export levels, and the resultant prevailing high levels of unemployment, and a continuing deterioration in macro-economic stability. This is notwithstanding our various economic blueprints for the economy to realise sustainable growth, development and poverty eradication. The unsatisfactory performance of the economy is being underpinned by declining domestic and foreign investor confidence levels, against the background of policy inconsistencies in an uncertain and uncompetitive business environment,”
1501: Minister Patrick Chinamasa now addressing the gathering.
1458: President Mnangagwa and Minister Chinamasa have entered the August House.
1441: Minister Chinamasa has arrived.
1436: The Speaker of Parliament, Advocate Jacob Mudenda, has read the Prayer as well as announcing that the Minister of Finance and Economic Planning Patrick Chinamasa will present the Budget at 3pm and suspends business.
1428: President Emmerson Mnangagwa has arrived at Parliament Building and will either proceed to his Office or into the Chamber.
1405: Cabinet ministers have started arriving and these include Major General SB Moyo, Supa Mandiwanzira and Kazembe Kazembe. Members of Parliament have already taken their seats.
1355: We will be giving you live updates from Parliament Building. Please stay with us.
1354: Zimbabweans wait with bated breath for Finance Minister Patrick Chinamasa’s 2018 National Budget Statement, which he is expected to present this afternoon; outlining macro-economic and fiscal objectives, targets and other projections, taking into account several underlying macro-economic and fiscal assumptions.
The 2018 Budget is hugely anticipated to provide solid indications on key economic parameters and underlying macro and micro-economic assumptions to drive economic performance, and the anticipated revenue out turns, critical for providing guidance on the expenditure capacity of the Government for the coming year.
Article Source: The Herald