Zimbabwe’s government is to unveil a 2005 budget on Thursday that will seek to reduce poverty affecting close to 80% of the population.
Acting Finance Minister Herbert Murerwa is to present the budget covering the 2005 calendar year that will also aim to attract investment and improve crumbling social services.
In a document released last week, Murerwa said the goal of ”our economic development programmes (is) to reduce poverty and improve living standards of our people”.
”The socio-economic exclusion of the poor from the mainstream of the economy is a potential source of political instability,” he acknowledged.
The government’s move to address potential social unrest stemming from poverty comes as the ruling Zimbabwe African National Union – Patriotic Front (Zanu-PF) party heads towards elections in March.
Poverty in Zimbabwe has doubled since 1995, while school enrollment declined to 65% in 2003, according to the International Monetary Fund (IMF).
Independent economist John Robertson said Murerwa will be faced with the difficulty of balancing the ”shrinkage in demand and rising costs of production”.
”The challenge he is going to live with is the consequences of the closure of many tax-paying companies,” said Robertson.
Zimbabwe has been reeling from political and economic crisis over the past four years, caused in part by President Robert Mugabe’s land reform program that saw thousands of white-owned farms seized and handed to landless blacks.
”There is no new investment, there are no new jobs and (as a result) fewer people pay tax,” Robertson said.
Brain-drain is another major problem facing Zimbabwe in recent years. A recent study by the South African-based Solidarity Peace Trust reportedly showed that between 60% and 70% of Zimbabwe’s work force, or 3.4 million people, are employed in neighbouring or overseas countries.
Zimbabwe has financed its own budget since international and Western lenders withdrew their support in 1999 over concerns about governance issues.
Another economist, Sam Undenge, said the budget must ”ensure fiscal discipline and stimulate economic activities, especially in agriculture and infrastructural development”.
Four years after the land-reform program was launched, agricultural production has dropped sharply in what was once southern Africa’s breadbasket, and unemployment is said to hover at 70%.
The goverment is also expected to focus its attention on containing inflation, which had by January 2004 topped the 600% mark, but is targeted to drop to around 20% next year.
A tough economic turnaround programme launched late last year has succeeded in reducing official annual inflation from a peak of 622% in January to 209% last month.
Murerwa is to present the budet in place of finance minister Chris Kuruneri, who is behind bars on corruption charges. – Sapa-AFP