Zimbabwe’s Finance Minister Mthuli Ncube faces daunting challenges in Thursday’s 2020 national budget announcement as he attempts to perform a delicate balancing act between addressing the needs of an expectant business sector and placating a restless civil service infuriated by worsening economic conditions and poor remuneration.
All eyes will be on Ncube on Thursday as he presents his 2020 national budget to a joint sitting of the Senate and National Assembly.
However, unlike his first budget presentation that took place in November 2018, conditions have significantly changed – both at the individual and economic levels.
When he was appointed by President Emmerson Mnangagwa in September 2018, the Cambridge trained economist and former African Development Bank vice president was touted as just the doctor that Zimbabwe needed for its festering economic problems.
Despite the pomp and fanfare that greeted his entry into public life, Ncube has not so far lived to the billing, resulting in people losing confidence in him.
The economy has worsened in the past year, with the cost of living rising by more than 15 fold since November 2018 and no end in sight for fuel and electricity shortages.
Analysts say the minister, who holds a PhD in Mathematical Finance from Cambridge University, should come up with a “real world” budget in which he seriously addresses the pressing needs of Zimbabweans and avoids “romanticising meaningless statistics”.
“What Zimbabweans are looking for is a budget that speaks to the reality on the ground and not the kind of textbook economics that we have so far seen from the minister,” economist Ariel Dzvimbo said.
He criticised Ncube for boasting about achieving a budget surplus at a time when civil servants are threatening to strike over poor working conditions and remuneration.
Doctors at Zimbabwe’s public hospitals have been on strike since September and have refused to return to work until they are paid United States dollar-linked salaries and allowances.
Other government workers have threatened to down tools unless their remuneration is reviewed upwards.
“We are eagerly waiting for his (budget) statement to see how he plans to address our plight. Anything short of win-win scenario for both the government and the civil servants could worsen the already volatile situation as far as employer-employee relations are concerned,” said a Harare-based civil servant who spoke on condition of anonymity.
However, one of the dilemmas for Ncube is that he does not have enough fiscal space to manoeuvre, given the limited domestic revenue sources and low or non-existent budgetary support from the international community.
The majority of Zimbabwean firms are currently struggling to stay afloat and looking forward to relief from Ncube’s budget statement on Thursday.
Most foreign investors are withholding their funds, unclear about the government’s policy direction.
The minister will also have to come up with measures to rein in mounting inflationary pressures that have seen prices rising sharply during the past few months.
The government suspended announcement of year-on-year inflation figures in June when the rate was pegged at 175.7 percent. The rate is now estimated at above 500 percent.
He will also need to set aside some funds to meet part of Zimbabwe’s arrears on foreign debt estimated at around US$2 billion.
Clearing arrears on debts to the World Bank and other multilateral financial institutions is one of the conditions for unlocking further economic assistance for Zimbabwe.
JN/APA