Zimbabwe’s 2018 budget lacks depth says chartered development financial analyst


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The 2018 budget was emphatic in its lack of such a bold infrastructural development vision. It seemed hamstrung by the need to issue assurances that this is a ‘New Economic Order’ without spelling out the decisive steps that could propel Zimbabwe onto the growth trajectory typified by South Korea from the 1960s or Portugal upon its integration into the European Union.

By way of an example, it is noteworthy that capital expenditure provision for the health sector is $26.7 million. Additionally, the budget did not substantiate the much-talked about vision of dualizing the major roads in Zimbabwe by laying out the foundation of a multi-year framework for the dualization.

An improved road network is a critical driver for domestic and international trade. The proposed changes to the Beitbridge Border post are welcome, and given the inefficiencies characteristic of that port of entry, any improvement would be defining.

The budget projects a 14.6% year on year increase in electricity generation in 2018 and committed to support the projected growth through the mobilisation of $649.1 million for infrastructure spending on energy projects.

This is highly critical and is commendable. However, this is for the implementation of projects that will “…ensure security, stability and affordability in energy supply…p167”.

It must be noted this is mere focus on recovery, and even in that regard, a 14.6% improvement on 2017 levels is nothing to celebrate: the 2017 levels are abysmal. This is just a drop in the ocean and matches the corresponding projected growth in the manufacturing sector of 2.1%, and on 2017 levels!

The 2018 budget under the banner the ‘New Economic Order’ should have been boldly ambitious and set the framework for trebling our current energy generation and transmission capacity in the next seven to ten years. That way, the scope of development would have provided the context and laid the framework for capital raising.

Agriculture

The budget duly recognises the importance of agriculture as an anchor to the revival of Zimbabwe’s economy. It makes a commitment to address the land tenure issue especially for the beneficiaries of the Land Reform Programme, and it seeks to address the scourge of multiple land ownership, idle land, and underutilisation of land through audits.

If followed through, this will be a critical step towards providing a basis for improving agricultural production and productivity.

Continued next page

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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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