Gov’t unveils $1.9 bln budget
The government has unveiled a 1.9 billion U.S. dollars budget, effectively making the use of multiple currencies official for the first time since independence.
The Herald reported on Friday that the move seeks to reflect the situation on the ground while propping up economic sectors and restoring such public services as health and education.
Inflation rendered impractical any local currency allocations with most goods and services now being paid for in foreign currency.
However, the Zimbabwe dollar remains legal tender alongside other currencies such as the rand, British pound, pula and the euro.
Effectively, companies can now pay salaries and allowances in both foreign currency and the local unit to uplift the standard of living for Zimbabweans.
Presenting the 2009 National Budget in Harare on Thursday, Acting Finance Minister Senator Patrick Chinamasa said the Budget’s main focus is to support productive sectors, stabilize inflation and restore the provision of basic public services.
A large portion of the budget, 1.45 billion U.S. dollars, will be directed towards recurrent expenditure while the balance will fund capital projects.
For the first time in years, the Zimbabwe government presented a balanced budget with a projected revenue inflow of 1.7billion U.S. dollars while an additional 200 million U.S. dollars from external partners has already been earmarked for specific projects.
Chinamasa proposed to allocate 157.8 million U.S. dollars to address the challenges in the health sector. The funds will be directed towards the procurement of drugs and other medical supplies, and operational expenses for government central, provincial and district hospitals. Local authorities and mission hospitals will also benefit.
“With this allocation, it is my expectation that our health institutions will now be able to have improved levels of essential and necessary drugs including other medical supplies,” he said.
This year’s budget pronouncement came against the backdrop of challenges that include rising inflation, shortage of goods and services, poor harvests and deteriorating delivery in such public services as health, water and electricity.
Zimbabwe has also not been spared from the ravages of the global economic recession.
Chinamasa acknowledged the support rendered by some of the country’s external partners through the provision of medical drugs, agricultural inputs and water treatment chemicals.
Education was allocated 149.8 million U.S. dollars for the construction and rehabilitation of schools and procurement of teaching material and equipment while he proposed to allocate 16.9million U.S. dollars to the Zimbabwe School Examinations Council to finance the setting, conduct and marking of public examinations.
Chinamasa proposed to allocate 47.4 million U.S. dollars to tertiary institutions for recurrent and capital projects. He emphasized that the government will not entertain any expenditure outside the budget.
The multiple currency system will apply up to a time when the Zimbabwe dollar appreciates. In the meantime, most taxes, fines for indiscipline and corruption, and import duties will be paid in foreign currency.
“Essential for shoring up the value of the Zimbabwe dollar will be the implementation of a combination of strict and painful fiscal and monetary measures that relate the Zimbabwe dollar monetary base to developments in the real sector, and the avoidance of recourse to money printing beyond the economy’s production of goods and services,” he said.
This will also help ease-off inflationary pressures presently obtaining in the economy. Licensing requirements to transact in foreign currency will be simplified, he added.
Posted by Wellington Chadehumbe
on January 31, 2009. Filed under Financial News.
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