Zim passes US$4b budget

Zimbabwe’s House of Assembly has approved the US$4 billion 2012 national budget nearly three weeks after it was presented.
Debate on the budget proposals was delayed after legislators argued that they needed time to scrutinize it and make recommendations.
It now awaits approval in the Senate before President Robert Mugabe can consider signing the Finance and Appropriations Bill into law.
The chairman of the House Committee on Budget, Finance and Investment Promotion, Paddy Zhanda (ZANU-PF) commended Finance Minister Tendai Biti (MDC-T) for a fair budget under difficult circumstances.
“No budget will ever please everyone so the question is how do we grow the cake?
“I however want to applause the minister for coming up with a reasonable budget under difficult conditions,” he said.
Zhanda, however, said the Finance Minister should have allocated resources to the Constituency Development Fund (CDF).
“The CDF is the fairest way of distributing capital within all constituencies and the minister should have allocated a mere one percent of the budget to CDF.”
In response, Minister Biti said the challenge the country was facing was to attract investors and increase the national purse.
“The resources are not enough, the cake is small, our budget challenge is how do we expand it?”
Biti said most of the country’s revenue was going to salaries.
He allocated over US$1b to education, US$345 million to health and US$345m to agriculture, with US$226m for a rolling Agriculture Three-Year Financing Strategy.
This is the first time Biti has given a significant allocation to agriculture.
Biti also allocated US$2 million to expedite surveying of farms for issuance of 99-year leases.
The leases are being improved so that they can be bankable and be used by farmers to access working capital.
Newly-resettled farmers have in the past accused Biti of using the budget to settle scores by deliberately underfunding agriculture.
ZANU-PF spearheaded land reforms and analysts have said underfunding of the sector was to discredit the programme and tarnish the capabilities of the new black farmers.
Biti also made allocations for students, youths, the informal sector and the unemployed.
He increased mining taxes, noting that despite the increase in international metal prices (particularly gold and platinum), royalties collected from precious stones had remained low.
Revenues from royalties stood at US$41.1m against sales of US$1.7b. “A fiscal regime which provides government with a fair share of economic rent generated from mineral extraction is thus desirable,” Biti said. He raised royalties on gold from 4.5 to five percent and those of platinum from seven to 10 percent. Biti called for greater transparency in the mining sector.
 

December 2011
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