BUDGET REVIEW: Experts urge Mthuli Ncube to prioritise currency stability, runaway inflation

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By Alois Vinga    

EXPERTS have called on Finance Minister Mthuli Ncube to address currency and inflation challenges bedevilling the economy when he presents the Mid-Term Budget Review and a Supplementary Budget this week.

The call comes at a time when this week’s Order Papers for the National Assembly have notified that Ncube will on Thursday 28th July present, not only the Mid-term Fiscal Policy Statement, but also a Supplementary Budget for this year.

Speaking to this week, Confederation of Zimbabwe Industries (CZI) president, Kurai Matsheza said as a matter of urgency the blueprint must tackle problems bedevilling productivity flows.

“Immediately we want issues of currency availability and pricing challenges to get a once and for all solution.

“Problems of currency allotment backlogs also need to be addressed. While we appreciate that speculation is driving inflationary pressures, on our part we expect inflation being caused by creation of new money to be dealt with,” he said.

The CZI leader also called for the need to address the challenge of tax bands as he insisted that the current structures are no longer consistent with obtaining economic realities.

“Also, the current levels at which the Intermediate Mobile Transfer Tax (IMTT) is pegged at depending on transactional volumes also need to be reviewed and cut down where possible.

“It will also be noble to address the problem of the huge external debt by coming up with a clearer strategy of addressing it. You will recall that the private sector continues to face difficulties in unlocking finance from global lenders because the high levels of indebtedness Zimbabwe is currently embroiled in,” said Matseza.

The Zimbabwe Congress Of Trade Unions (ZCTU) secretary general, Japhet Moyo also emphasized the need to find a lasting solution for the currency problems.

“This represents an opportunity to dollarize the economy considering that we have been facing a number of challenges with our own currency. If it happens that the supplementary budget is to be presented in the Zim$ then it means that we are in problems.

“We also expect the treasury boss to put in place measures to cushion the vulnerable groups  in society from the current inflationary pressures which have eroded pensions,” he said.

Moyo said there is also a need to address the issue of civil servants salaries alongside other social welfare expenditures.

Top economist, Doctor Prosper Chitambara implored that the forthcoming budget review and supplementary budget must target inflation and social welfare expenditure.

“Definitely there is definitely a need for a supplementary budget to bridge the gaps created by inflationary pressures among other causes. The budget review must also target social welfare institutions like health care provision.

“It will also be noble for the blueprint to target adjustment of tax bands from the current lowly figures to at least those that are within the sustainable tax bands which are in line with the Total Consumption Poverty Lines (TCPL),” he said.