Is Zimbabwe economy $19 billion, $40 billion or $180 billion?


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Mr. Speaker Sir, the figures are extraordinary. The Hon. Minister estimates that our Gross Domestic Product (GDP) is $19 billion in 2018 but the total value of swipe transactions in 2017 was $76 billion and the total value of RTGs transactions, about $50 billion and if you add that, the total value of transactions through systems like ecocash, which constitutes another $1 billion a week; Mr. Speaker, we are looking at the total value of electronic transfers in 2017 of $180 billion. To me as an economist, that reflects the fact that our actual economy is much bigger, probably more than double the size of the figure estimated by the Minister. His figure only reflects the value of the formal sector, but if you add the informal sector trading into our national economy, we probably have an economy in excess of $40 billion.

Mr. Speaker, several months ago when you raised the idea that we could have a $10 billion budget, I was very skeptical, but the reality is; if our real GDP is $40 billion, then 25% of our GDP is $10 billion. Mr. Speaker Sir, I believe that we can cover the shortfall in our revenues. We can provide more money for our health sector; we can fund the Parliament of Zimbabwe properly if we put a small tax on electronic transfers. If we put 5%, five cents in a dollar on that, it is $9 billion of new revenue.

Mr. Speaker, I have spoken to our Committee and it is skeptical and has urged me to make sure that this matter is raised in the Committee in the next month or so. However, I think this is an urgent matter because we must resolve this question of our deficit and the only way to resolve it is to tax the people in the informal sector. If you put a tax on electronic transfers, it is easy and cheap to collect and everybody pays. If you step into an emergency transport taxi and you pay your fare using ecocash, you pay five cents to the Minister of Finance, it would solve our problems overnight. It will reduce expenditure on labour and salaries to 35% of our budget; it would eliminate our deficit immediately and give us resources to settle our bill with the multinational agencies. I think that we have to look at this.

I do not believe for one minute that Zimbabwe has an economy which is only $19 billion. Just look around you. I went to dinner the other night at a restaurant in town; it was packed to capacity. This is not a poor country, this is a country which is rich and I believe that our people would not object to raising funds in this way from our existing population and I urge the Minister to consider this. On expenditure and rationalisation, Mr. Speaker, it is very difficult to reduce expenditure and it is one of the toughest jobs in the financial game. Reducing expenditure on salaries is very difficult because you are dealing with people’s lives – [HON. MEMBERS: Inaudible interjections.] –

THE HON. SPEAKER: Order, order.

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The Insider

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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