The much awaited Mid-Term budget statement suffered an anticlimax having attracted huge interest in the week build up with expectations of a reviewed budget allocation to meet increasing Covid-19 expenditure as cases continue to rise.
We are aware that government initially wrote to development partners seeking US 300 million assistance which got a response of US 202 million, making it difficult for the Minister to navigate past the troubled waters.
However, there was a general feeling that the budget needed to be reviewed from the initial ZWL 66.2 billion given the greater need to prepare for the worst to come from the Covid-19 pandemic and also to counter the inflationary developments.
Currently, the healthcare system is in bad state, both its infrastructure and human resource component at a time when Covid-19 cases are increasing.
There seem to be no clear plan of action in the budget to commit to the worsening of events.
The economy is set to shrink to -4.5 percent of GDP from initial projections of 3 percent with inflation expected to continue at staggering levels of 300 percent by year end.
This bleak outlook is a function of two factors: lack of support to productivity and preparedness.
The Minister chose to be cautious and consolidate what remains of the deteriorating economy than to proffer remedies to expand it; These are unprecedented times which call for tough choices.
A ZWL$ 800 million budget surplus in the six months to June was achieved yet there seem to be lack of appetite to stimulate the economy further.
Most businesses are struggling to stay afloat hence the general feeling that the Minister should have given emphasis on business bailout particularly the small and medium enterprises that make the bulk of businesses in the country.
Already industry had indicated that the 20 percent interest rate on the Stimulus package was too high for a bailout purpose given the harsh operating environment and needed to be revised and the Minister missed this.
Consequently, the manufacturing sector becomes the worst loser of all productive sectors with a projection of -10 percent.
According to some analysts, there seem to be a generalized appreciation of the impact of Covid-19 on the economy.
Job losses in the past two months are a cause for concern and the minister should have made interventions to save struggling firms either by way of tax relief measures or simply avail a soft bailout package to save the remaining jobs under threat.
There are a lot of key areas the Minister missed and more worryingly, he even missed some of his brainchild projects such as urban transport.
Urban transport system is in disarray with the Zupco franchise seemingly on its knees as it has been overwhelmed.
There was expectation that the Minister would also make recommendations to improve private sector involvement in transport sector albeit in a properly regulated manner.
The continued subsidy program on transport remains highly unsustainable for both the government coffers and the commuting public that has to endure long queues waiting for limited buses.
These queues have become potential hotspots for Covid-19 transmissions.
As it stands, the Zupco franchise is yet another example of a failed state enterprise that really needs urgent rethinking of its business model to relieve the fiscus of continuous financial strain.
Some have viewed the project as a populist stunt.
