Zimbabwe Finance Minister Herbert Murerwa on Thursday asked Parliament to approve a Z$327,2-trillion supplementary budget — more than twice the amount of money the government had initially said it would spend in 2006.
Murerwa had at the beginning of the year set the Budget for 2006 at Z$123,9-trillion.
In the most vivid illustration of the Harare administration’s appetite to spend more in the face of runaway inflation — the world’s highest at 1184,6% — Murerwa told parliamentarians that the initial amount budgeted for the year is finished.
The government will ground to a halt if Parliament does not approve additional expenditure, he said in an hour-long speech greeted with derision from opposition Movement for Democratic Change (MDC) legislators.
“Resources initially allocated are no longer sufficient to enable the government machinery to function up to the end of the year, making it necessary that I revisit the 2006 Budget estimates,” said Murerwa as MDC parliamentarians called on him to resign because he had no idea how to fix Zimbabwe’s six-year economic crisis.
Murerwa appeared to put blame for the government’s growing need for cash on his boss, President Robert Mugabe, saying the supplementary budget is also necessary to raise resources for several additional government ministries set up by Mugabe well after the 2006 Budget had been finalised.
The minister said the additional money he is seeking Parliament to approve will be used to finance operational budgets of line ministries, capital projects and some projects under the National Economic Development Priority Programme (NEDPP), which the government says will turn around the economy.
Economic experts say the NEDPP — one of no less than four economic blue-prints the government has announced since 1999 but with little benefit to the economy — will certainly flop unless Mugabe’s government learns to live within its means.
The government will also have to address its appalling human rights record, restore the rule of law and uphold democracy in order to be reintegrated into the international community whose help is vital to any programme to resuscitate Zimbabwe’s comatose economy, economic experts say.
Murerwa frankly admitted that government-backed farm seizures are frightening commercial banks from funding the agriculture sector, which until the government began its land-grab exercise in 2000 was the backbone of an economy that was among the most vibrant in Africa.
“Farm disruptions have also continued to undermine the confidence of banks to finance bankable farming operations. Banks require guarantees that when they finance crops, farmers will be able to harvest, and therefore repay their loan obligations,” said Murerwa.
He said the government will “now take a firm stand against any new unwarranted disruptions on farming operations”. But similar promises in the past by both Murerwa and Mugabe to act to end farm seizures have come to naught as top officials of the government itself and of the ruling Zanu-PF party continue plundering former white farms.
The finance minister tried to lessen the burden for ordinary Zimbabweans by widening the tax-free threshold to Z$20-million from Z$7-million per month beginning September 1. He also adjusted tax bands to end at Z$54-million per month, above which income will be taxed at 35%.
Murerwa said the new measures will release about Z$35-trillion to taxpayers, thereby enhancing purchasing power.
Zimbabwe is battling an immense economic crisis that is characterised by hyperinflation and shortages of fuel, electricity, essential medicines, hard cash and just about every basic survival commodity.
The MDC and major Western governments blame the crisis on repression and mismanagement by Mugabe, who has ruled the country since independence from Britain 26 years ago.
The 82-year-old president denies ruining Zimbabwe and says his country’s problems are because of economic sabotage by Western countries out to fix his government for seizing white land for redistribution to landless blacks. — ZimOnline