THE 2024 budget statement was presented in backdrop of a tough and challenging year for the working people of Zimbabwe. A year in which the citizen had been abused by extreme levels of inflation, emasculation by a rigged exchange rate, extortionate taxes, power shortages, poverty and the aftermath of a scorching drought.
Naively, the citizen and business thus hoped for a bold, honest, decisive and technically sound budget that would address the crippling challenges of the day, offer hope and carthasis to a broken fatalistic desperate and disparate population.
Regrettably, finance minister Mthuli Ncube’s budget was nothing but a shallow, hollow, narcissistic and dishonest anti-people ritual. The budget correctly bluetooths everything cataleptic about the Mnangwagwa regime: incompetent, ideologically vacuous, corrupt, insensitive, vicious and toxic.
Seven issues amplify the fatality of Ncube’s project. First is the clear failure to calibrate the budget in United States dollars. In a volatile high inflation environment, expressing the budget in a local currency ravaged by serious inflation pressures is clearly a faux pas.
Zimbabwe has gone through six bouts of currency failures and any budget expressed in a local currency is a facade. A volatile ZiG also creates accounting chaos for businesses. Ultimately, a ZiG-based budget is simply a means to mislead and hide the true depth of economic mismanagement.
Second, Ncube’s micro economic framework and projections are simply unsound and blatantly dishonest. A 2 percent GDP growth for 2024 is simply overstated. It underestimates the ZiG induced depression that has captured markets since April 5, 2024. A period that has seen many companies close or downsize.
There has been a massive curtailment of revenue inflows in companies and in the government itself. Aggregate demand simply collapsed resulting in government revenues also collapsing to the point that at the present moment the regime has no capacity to pay wages.
The budget projection of a 6 percent growth in 2025 is dross. It is based on three assumptions: decent rainfall, low inflation and a stable currency under a tight fiscal and monetary policy.
Expecting this government to live within its means and to keep a tight fiscal ship is madness.
The regime must monetise its rent-seeking projects particularly the feeding trough that road construction has become, but particularly command agriculture and multiple presidential schemes. Once the boys are paid, broad money shoots through the roof, inflation spikes and the ZiG craters.
Third, the 2025 budget framework is unsound and must be rejected by parliament. In 2024, ZiG 110,722 billion revenue will be collected against projected expenditure of ZiG 119.972 resulting in a deficit of ZiG 9.3 billion. They don’t sing about surpluses anymore.
In 2025, projected revenue jumps to ZiG 276.4 billion or US$ 7.5 billion, whilst expenditure is ZiG 276.3 billion or US$7,668 billion.
On a growth of 6 percent it eludes one’s wisdom how revenue will grow by 150 percent from ZiG 110 billion for 2024 to ZiG 276 billion.
Put another way, Ncube expects 2024 revenues of ZiG 110 billion or US$3.05 billion to jump to US$7,5 billion. This mendacity reflects a deep disrespect of Zimbabwean intellect. More than that it reflects total and utter contempt of parliament.
But the real issue is where will Ncube extract US$7,5 billion when companies have been squeezed dry and are closing down, retrenching or relocating?
Fourth, the regime’s proposed revenue measures are narsissitic and lack empathy. Imposing taxes on betting income, on pizza and chicken is ridiculous. Targeting informal traders in spare parts, grocery traders, hardwares, lodgers, fabric merchandisers and boutiques for taxation is cruel and ridiculous.
The regime suffers from the warped view that it can extract money from stone. The pathological obsession with taxation is sickening.
There is a crises of under accumulation in Zimbabwe. Companies are shutting down and unemployment is on the rise. The 2025 budget had a duty to create a stimulus and to provide incentives for consumption and production to jump start the economy. Taxes had to be reduced and various stimuli provided. Instead, a vacuous bankrupt government went the opposite of what logic dictated.
Sixth, there had to be a push for currency reform. ZiG has failed and failed in absolute terms. The epicentre of the Zimbabwe crises is exchange rate mismanagement.
Finally, given the current structural energy crises, the budget ought to have addressed the power situation. Indeed it is ridiculous to imagine the economy will grow by 6 percent without power. No wonder and very poignantly ZESA went off during the budget presentation.
Truth is, this is the worst government in the history of governments and the 2025 budget is a further exhibit of this fact.
Tendai Biti was Zimbabwe’s finance minister from 2009-2013
