THE Morgan Tsvangirai-led MDC says the announcement last week of the US$1,9 billion national Budget and this week’s monetary policy statement were in breach of the power-sharing agreement it signed with Zanu PF and the smaller formation of the opposition party and will not resolve the economic crisis.
Tapiwa Mashakada, the MDC-T economic affairs spokesperson, in an interview with the Zimbabwe Independent said acting Finance minister Patrick Chinamasa and Reserve Bank governor Gideon Gono announced the budget and monetary policy statement without consulting his party.
He said the government should have deferred the budget and monetary policy to allow for the consummation of the all-inclusive government. The power-sharing government should be formed by next Friday.
In his Budget presentation to parliament, Chinamasa projected inflation to go down to double-digit levels and growth of 2% by year-end anchored on increased inflows of foreign currency because of the adoption of dollarisation.
 “There was no input from us,” Mashakada said. “This is despite that we are going to be part of an inclusive government and that we will be in control of the Finance ministry.”
He said the MDC-T was “uncomfortable” that the Budget put more emphasis on dollarisation and tax issues instead of prescribing ways to increase local production.
“The Budget touches on fundamental issues like dollarisation and far-reaching issues pertaining to taxes. The issue of dollarisation is one issue that has to be thoroughly scrutinised and interrogated so that it doesn’t displace our own currency,” Mashakada said. “We still need a strong currency backed by production and a robust supply response. Dollarisation must not mean that the economy should be turned into a consumer economy.”
He said the Budget was not sound on remuneration of civil servants, adding that they should not be paid in hard currency-denominated vouchers.
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Mashakada said: “It does not make sense to dollarise when the demand side of the economy – the incomes of the workers – are still pegged in local currency.
“You can’t just cut and paste a Budget. The Budget should be critically evaluated. MDC’s critical evaluation of the budget is that it is trying to turn the economy far right; the poor, the unemployed and vulnerable are going to suffer more.”
He felt that the Budget did not address thoroughly the issue of social nets to curb poverty.
“The Budget should have been more robust on the humanitarian crisis, giving much attention to issues to do with food and health security for instance. It did not look at that adequately,” the Epworth MP said.
He said it was ambitious for the government to try to raise US$1,7 billion of the Budget through taxes when revenue streams in the country were drying up. The balance, Chinamasa said, would come from cooperating partners.
“The budget is US$1,9 billion – where does it come from? We are budgeting on a currency whose supply we do not determine. Where will they get all that money from and these are some of hard questions the budget tried to run away from,” Mashakada said.
He was pessimistic that inflation could be reduced to double-digits, adding that it was a pipedream to project a 2% economic growth.
“Our Budget is a cash budget and this is not possible because there are accrual and arrears in the accounting. That is not practical and these heavy choices are most likely to weigh on the Budget,” Mashakada added. “I don’t think the positive economic growth rate targeted at 2% is achievable this year, especially when the country has been registering a decline in growth rate for the past nine years. This was just too much optimism on the part of the minister.”
The MDC-T said government should move away from blaming sanctions for the country’s economic woes and focus on “how to revive our foreign policy” with other countries.
“Instead of harping on sanctions, hard questions on governance and how to instill market confidence should be thought of seriously,” Mashakada said.
He said the country needed a transitional Budget that was properly thought out and crafted by a new inclusive government that consults all stakeholders.
The party’s secretary for economic affairs, Elton Mangoma, said Gono had no mandate to announce the monetary policy because his reappointment was still a matter of discussion in the negotiations to form the inclusive government.
Mangoma said: “Firstly, Gono has no locus standi to act as RBZ governor as his reappointment is still contentious. The Sadc summit conceded that his reappointment is subject to fresh negotiations.
“The logical position would have been for both the national Budget and the monetary statement to be deferred to allow for the consummation of the inclusive government.”
Mangoma criticised Gono’s decision to slash 12 zeros from the local currency saying it was not a panacea to the country’s economic ills.
“The real zeros that need to be lopped off are the charlatans and corrupt barons in Zanu PF who are milking the country,” he said.
Mangoma said new measures adopted by the central bank that give “unbridled” leeway to gold and diamond traders would create serious leakages in precious minerals that will “allow the big sharks, who are mainly found in Zanu PF, to fleece” the country. The MDC—T said it was also against the idea of licensing of rural shops and vendors as stated in the monetary policy.
“The decision to license rural shop owners is at variance with the reality of the lack of adequate stocks in most rural shops. For a rural shop owner with very few items on his shelves to afford United States dollars in licence fees is an extortionate measure, to all intents and purposes,” Mangoma said. “It will be a casino economy where even vendors and road-side dealers are all required to procure licences of US$10 from the RBZ to engage in mundane economic activities that are of no benefit to the national economy.”        Â
                                                                                The MDC-T also doubted that the government would do anything to fight corruption.
In the budget Chinamasa said those found guilty of corruption would pay heavy fines in US dollars.
Asked what was the ideal budget, Mashakada said: “The party is not going to pre-empt our Ministry of Finance package now.”
BY WONGAI ZHANGAZHA
