A top economic analyst in the country, Victor Bhoroma has dismissed Finance minister Professor Mthuli Ncube’s ZWL$800 Million budget surplus announced last week saying it is insignificant as it was achieved on the back of poor remuneration of civil servants, shortage of drugs in public hospitals among other challenges facing the country.
In his weekly economic analysis, Bhoroma listed problems facing the country that needed government attention while Professor Ncube focused on attaining a budget surplus.
‘Out of the budgeted Z$12 billion, infrastructure spending only accounted for Z$2.1 billion in the period under review. Zimbabwe has a serious infrastructure deficit on roads and transportation, ports of entry, water and sanitation, health care and information technology.
“Countrywide, citizens are having to do with travelling for long distances to fetch clean water and drinking water from unsafe sources. The surplus is also misleading as it ignores the actual cost of consumption subsidies to the taxpayer for commodities such as fuel, cooking oil, mealie-meal and wheat that have resulted in abnormal growth in money supply and parallel funding through the central bank,” said Bhoroma.
“The economy is in dire need of financial packages especially the Tourism and Hospitality, manufacturing and distribution sectors that have been heavily battered by the corona virus restrictions.
“Overall, the mid-term budget sounded overly optimistic on the country’s growth prospects in 2020 and 2021 amid the worsening economic conditions on the ground. The expectation that inflation will gradually decline to 300% is too ambitious as well considering the incessant growth in money supply from parallel funding at the central bank,” he added.
Bhoroma also commented on the suspension of the Zimbabwe Stock Exchange saying the move has dealt a major blow to future prospects of attracting foreign investment into the economy while negatively impacting cash flows for the active counters and institutional investors such as pension administrators and insurers.