LIVE BLOG: 2018 NATIONAL BUDGET

UPDATES by Costa Mano
Download National Budget Statement For 2018 Here

1421: Minister Chinamasa has ended his budget statement presentation and that concludes our updates. Thank you for joining us. 

Finance and Economic Planning Minister Patrick Chinamasa flanked by his wife Monica pose for pictures on arrival for the 2018 budget presentation at parliament building in Harare today - Picture by Kudakwashe Hunda

Finance and Economic Planning Minister Patrick Chinamasa flanked by his wife Monica pose for pictures on arrival for the 2018 budget presentation at parliament building in Harare today – Picture by Kudakwashe Hunda

1618: The Government entered into Special Mining Lease Agreements with some platinum group mining companies which provide for a specific royalty rate of 2.5%. However, platinum produced by mining companies that do not have a Special Mining Lease Agreement remained liable to a royalty rate of 10%, as provided for in the Finance Act. In line with the principles of equity and fairness in the taxation system, Government committed, in April 2017, to align the royalty rates to 2.5% as part of the 2018 Budget measures. The 2018 Budget, therefore, proposes to regularise royalty rates for platinum on all platinum group mining companies with effect from 1 April 2017, until August 2019.

1613: In order to eliminate inefficiencies due to congestion arising from activities of unauthorised persons operating at Beitbridge Border Post, and also drawing from the new dispensation, as enunciated by His Excellency, the President, Government proposes an extension of Operation Restore Legacy by the Zimbabwe Defence Forces, to Beitbridge Border Post, in order to restore order.

The Zimbabwe Defence Forces command structures will, therefore, with immediate effect, coordinate with other security agencies removal of touts, vendors and beggars from the Customs Controlled Area.

Furthermore, in order to ensure that only authorised persons enter the Customs Controlled Area, thereby eradicating loitering, it is proposed to demarcate the pathway for pedestrians entering and exiting the Customs Controlled Area, in line with best practice in the region.

1608: Sport betting has rapidly grown as a recreational activity, generating in excess of US$30 million per annum. In order to mobilise resources to upgrade community recreational centres, the 2018 Budget proposes to levy 5% of gross takings by bookmakers, with effect from 1 January 2018.

1607: Lithium, which is used in the manufacture of automotive batteries and the bulk of dimensional stones such as Black Granite and Marble, are exported with minimum value addition, depriving the country of potential foreign currency receipts and opportunities to create employment.

For example, lithium concentrate with a grading of 5 to 6% lithium oxide is exported through off-take agreements at prices of about US$600 per tonne. Upon beneficiation, the resultant lithium carbonate is sold at prices ranging from US$15 000 to US$20 000 per tonne.

The 2018 Budget, therefore, proposes to impose an export tax of 5% on the gross value of exported lithium.

President Emmerson Mnangagwa arrives for the 2018 budget presentation at Parliament Building in Harare today- Picture by Kudakwashe Hunda

President Emmerson Mnangagwa arrives for the 2018 budget presentation at Parliament Building in Harare today- Picture by Kudakwashe Hunda

1554: $132 million for 2018 general elections has been allocated in the budget. The Government has also fully the current voter registration drive.

1552: Government has adopted a zero tolerance on land barons. Civil servants bonuses will be paid in 2018 but will be staggered as usual.

1546: In line with the envisaged growth in the economy, total revenue[1] collections in support of Government operations, programmes and projects, excluding Statutory Funds, are estimated at $5.071 billion for the coming 2018 fiscal year.

1543: Economic growth rate expected to be 4.5% in 218

1541: On indigenisation, Government is, through the Finance Bill being submitted to this August House for the 2018 financial year, amending the Indigenisation and Empowerment Act, to bring the following into effect from April 2018:

Extractive Sector

Diamonds and platinum are the only sub-sectors designated as ‘extractive.’

Accordingly, the proposed Amendments will confine the 51/49 Indigenisation threshold to only the two minerals, namely diamonds and platinum, in the extractive sector.

The 51/49 threshold will not apply to the rest of the extractive sector, nor will it apply to the other sectors of the economy, which will be open to any investor regardless of nationality.

Reserved Sector

The Reserved sector is only for Zimbabwean citizens, and for non-Zimbabweans, entry into the Reserved sector will only be by special dispensation granted by Government, if the proposed business:

Creates employment; Affords the opportunity for the transfers of skills and technology for the benefit of the people of Zimbabwe; promotes the creation of sustainable value chains; and meets the prescribed socially and economically desirable objectives.

As we seek to attract both local and foreign investments, existing and potential investors become fully guided by the Amendments we seek to effect through the Finance Bill that is being brought to this August House.

Those already in the Reserved sector, except gold panning, will be required to register and comply with our laws.

Buhera South legislator Cde Joseph Chinotimba shares a lighter moment with Minister of Lands, Agriculture and Rural Resettlement Air Marshal Perrance Shiri before budget presentation in parliament today. Picture by John Manzongo

Buhera South legislator Cde Joseph Chinotimba shares a lighter moment with Minister of Lands, Agriculture and Rural Resettlement Air Marshal Perrance Shiri before budget presentation in parliament today. Picture by John Manzongo

1531: State Enterprises that exhibit potential will be reformed, while those which cannot be rehabilitated will be privatised or face outright closure.

The Government had received requests for 6000 ECD teachers but has shifted this obligation to schools and parents since nine primary school grades are considered onerous.

1528: Measures to contain Budget expenditures, and conserve scarce foreign currency, will extend to review of foreign business travel practices. Experience has shown that Zimbabwe delegations to regional and international fora being among the largest from the region at such gatherings.

In this regard, the following requirements now apply:

Strict reduction in the size of delegations to levels that are absolutely necessary; and where there is Diplomatic presence, taking advantage of this to realise representation in outside meetings.

1526: The Cabinet decision to abolish the Youth Officer posts under the Ministry of Youth, Indigenisation & Empowerment and transfer the roles and function to the Ward Development Coordinators in the Ministry of Women, Gender and Community Development is being implemented with immediate effect.  Currently, too many grades in the Public Services are provided with vehicles as a Condition of Service every five years, with the vehicles being licenced, insured, serviced and repaired at Government expense. The total outstanding request for Condition of Service vehicles is now close to US$140 million, which the economy in its state cannot afford.

Government, therefore, has reviewed the vehicle Scheme as follows:

Permanent Secretaries and equivalent grades, one personal issue vehicle;

Commissioners and equivalent grades, one vehicle;

and Principal Directors, Directors and Deputy Directors and their equivalents, vehicle loan scheme.

Minister of Sports, Arts and Recreation Cde Kazembe Kazembe

Minister of Sports, Arts and Recreation Cde Kazembe Kazembe

1521: A number of public officials continue to be engaged in the public service well beyond their retirement age. In this regard, from January 2018 Government will, through the Service Commissions, retire staff above the age of 65. The staff that retire will be assisted with access to capital, to facilitate their meaningful contribution towards economic development, including taking advantage of allocated land, for those who are beneficiaries of the land reform programme. Furthermore, Government will also introduce a voluntary retirement scheme that serves to rationalise the public service wage bill, whilst providing financial incentives to beneficiaries to engage in economic activities in such areas as farming, and start-up of small business enterprises.

1519: It is paramount that the ‘New Economic Order’ judiciously adopts Fiscal Anchors, in order to instil and strengthen fiscal discipline for effectively improving Budget management and enhancing coordination of fiscal and monetary policies.

The Fiscal Anchors for the Budget relate to:

Fiscal Deficit Targeting, under which the Budget deficit for 2018 is halved to below 4% of GDP, and subsequently capping Budget deficits below 3%, in line with best practices and financing capacity of the economy;

Sustainable level of Public Debt to GDP, consistent with the Section 11(2) of the Public Debt Management Act [Chapter 22:21] which requires that the total outstanding Public and Publicly Guaranteed Debt as a ratio of GDP should not exceed 70% at the end of any fiscal year;

Ceiling of Government Borrowing from the Central Bank, in line with Section 11(1) of the Reserve Bank Act [Chapter 22:15], which requires that Reserve Bank lending to the State at any time shall not exceed 20% of the previous year’s Government revenues; and

Minimum Spending on Infrastructure, by re-directing substantial resources towards capital development priorities, through increasing the capital Budget thresholds from the current 11% to 15% in 2018 and 25% by 2020.

Progressive reduction of the share of Employment Costs in the Budget to initially 70% in 2018, 65% in 2019, and below 60% of total revenue by 2020, to create fiscal space to accommodate financing of the development Budget and operations of Government.

Central to adherence to the above Fiscal Anchors will be discipline and the political will to implement the necessary measures, avoiding arbitrary reversals to agreed Cabinet policy positions that entail pain and sacrifice.

Minister of Information Communication Technology and Cyber Security Cde Supa Mandiwanzira(R) arrives at the Parliament Building alongside Foreign Affairs and International Trade Minister Major General Dr Sibusiso Moyo-Picture by Wilson Kakurira

Minister of Information Communication Technology and Cyber Security Cde Supa Mandiwanzira(R) arrives at the Parliament Building alongside Foreign Affairs and International Trade Minister Major General Dr Sibusiso Moyo-Picture by Wilson Kakurira

1516: Money creation, through domestic money market instruments which do not match with available foreign currency, only serves to weaken the value of the same instruments, translating into rapid build-up in inflationary pressures, to the detriment of financial and macro-economic stability. This has seen growing mis-matches between electronic money balances and the stock of real foreign exchange balances, as reflected by cash holdings and nostro balances of banks. The mis-match between the supply and demand for foreign exchange, has also led to the emergence of foreign exchange premiums in the market.

1514: The ‘New Economic Order’, therefore, gears towards restoring discipline, fostering a stronger culture of implementation, supported by political will in dealing with the following: correcting the Fiscal Imbalances and Financial Sector Vulnerabilities; Public Enterprises and Local Authorities Reform; Improving the unconducive Investment Environment; Dealing with Corruption in the Economy; Re-engagement with the International Community; Stimulating Production, and Exporting; Creation of Jobs, as well as a  credible 2018 election

Norton MP Themba Mliswa-Picture by Wilson Kakurira

Norton MP Themba Mliswa-Picture by Wilson Kakurira

1510: The challenges facing the economy demand well thought-out, and focused, Government interventions for a much more rapid and sustained recovery path that delivers on jobs as envisaged and outlined in His Excellency President E.D. Mnangagwa’s Inaugural Address.  The Recovery Measures towards aNew Economic Order’ usher a break away from policy inconsistencies, reversals and hesitations of the past, and signal a strong Business Unusual Approach.

1509: Revenue for the year will be $3.9 billion up from 3.5 billion realised last year.  Expenditure will be $5.6 billion against the budgeted $4.1 billion. $2.9 billion are the borrowings for this year.

1506: Inflation will average 3% in 2017 and is expected to remain as such into 2018.

“Our economy has not been performing to its potential and to the expectations of the citizenry, as demonstrated by low production and export levels, and the resultant prevailing high levels of unemployment, and a continuing deterioration in macro-economic stability.  This is notwithstanding our various economic blueprints for the economy to realise sustainable growth, development and poverty eradication. The unsatisfactory performance of the economy is being underpinned by declining domestic and foreign investor confidence levels, against the background of policy inconsistencies in an uncertain and uncompetitive business environment,”

Minister of Justice, Legal and Parliamentary Affairs Cde Ziyambi Ziyambi

Minister of Justice, Legal and Parliamentary Affairs Cde Ziyambi Ziyambi

1501: Minister Patrick Chinamasa now addressing the gathering.

1458: President Mnangagwa and Minister Chinamasa have entered the August House.

1441: Minister Chinamasa has arrived.

1436: The Speaker of Parliament, Advocate Jacob Mudenda, has read the Prayer as well as announcing that the Minister of Finance and Economic Planning Patrick Chinamasa will present the Budget at 3pm and suspends business.

1428: President Emmerson Mnangagwa has arrived at Parliament Building and will either proceed to his Office or into the Chamber.

1405: Cabinet ministers have started arriving and these include Major General SB Moyo, Supa Mandiwanzira and Kazembe Kazembe. Members of Parliament have already taken their seats.

The media are waiting patiently to capture the Minister of Finance and Economic Planning Patrick Chinamasa and his briefcase that the nation hopes will carry some good news for them. Picture by Wilson Kakurira

The media are waiting patiently to capture the Minister of Finance and Economic Planning Patrick Chinamasa and his briefcase that the nation hopes will carry some good news for them. Picture by Wilson Kakurira

1355: We will be giving you live updates from Parliament Building. Please stay with us.

1354: Zimbabweans wait with bated breath for Finance Minister Patrick Chinamasa’s 2018 National Budget Statement, which he is expected to present this afternoon; outlining macro-economic and fiscal objectives, targets and other projections, taking into account several underlying macro-economic and fiscal assumptions.

The 2018 Budget is hugely anticipated to provide solid indications on key economic parameters and underlying macro and micro-economic assumptions to drive economic performance, and the anticipated revenue out turns, critical for providing guidance on the expenditure capacity of the Government for the coming year.

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  • Trex1

    Quick wins. Mugabe is having a heart attack while hearing this budget.

    • Leoric

      Mugabe is living luxurious , he`s a free man and none of his acquired wealth will be touched …. these all thieves as they were since 1980 , no old dog can learn new tricks it will do the same tricks over and over . Register to vote and make a real change .

  • Nesongano

    Please ask Ministry of Finance to post the budget statement on their website.

    • general

      this is welcome move .Zimra shld be the first to reduce managers pay officers well and train officers to treat clients well .Forbes boreder and Beitbridge have been entries of smuggling which has involved officers and agents fuel ,undeclared goods have found they way thru those ports .there is need to weed out agents and officers involved including managers who have been part of syndicates .Pasi shld return money he stole thru salaries and tenders on uniforms .Mr chinamasa and Bonyongwe u know how much was stolen by #### why did u accept his resignation.ICHOOO

  • JOJO

    Sounds good

  • JOJO

    sounds good

    • Madara

      sounds good, doesnt work

  • Cde Kangai

    Best budget since 1980. Well done Minister Chinamasa.

  • Chamunorwa

    Will Tobaiwa Mudede finally retire under the proposed changes? He must be a man of some antiquity.

  • Community Youth

    Sad news for the vendors at the Border Posts. Sad news for Youth Officers. Positives derived from the cost cutting measures. Not really the best of budgets, but an improvement from previous ones. Just curious why the Defence forces are running most institutions in Zimbabwe. Their place is in the barracks.

    • Cde Chandunga

      They are disciplined and are easy to discipline as well.

  • Ahmadinejad Mosuavi

    A fantastic budget of any measure for the past 37 years. If we have done this since 1980, we could easily have been the most advanced country in Africa. I look back the Mugabe era with a sombreness .

  • deee

    To be honest the revision on indigenization is a step backwards.its actually short sighted without considering the future and more of thinking with our stomach, It is mortgaging our resources for peanuts, which was the only thing that we can bargain with in any fair business transaction.

    • Hombarume

      OUR Resources? My friend, ask Marange people who owns “their” diamonds.
      Wake up and know the government owns all resources. What you can do is join on converting those resources and get you economic gain.
      Use your personal economic gain to get your personal resources.
      As long as you do not have a title deed for where the resource is, just know its government resource. They can give it to whoever makes them benefit or stay in power longer.

      • betty

        Whilst agreeing with you deee has a point, not everyone has the capability to own resources yet. Their children might have the capacity but it will be way harder than it should be.

      • musayigwa

        You are a clear thinker.

    • musayigwa

      “OUR RESOURCES” = Nationalized resources = Government = Minister and his perm sec at the honey jar with dotted lines to the men with powers. eg SUPA @ Potraz, Telecel, Netwone, MPOFU @ Marange, zinara. And they chew that money abroad so that non of that value, even the bread crumbs will ever benefit ordinary us eg Gucci Grace

      Know this for certain, “our resources” only matters for elections and sloganeering! Ask yourself, which companies have served this country better –

      RioTinto owned Murowa Diamonds contributed more in revenues than all the indigenous “compliant” Marange diamond companies.
      StanChart, CABS, NMB and Barclays remain the safest institutions compared to compliant ZABG, Metbank and Interfin.
      Platinum mines are still the biggest fiscal revenue providers compared to compliant Hwange, Zisco, ZMDC.

  • Win-Win

    Constructive proposal below from the budget if it can be followed to boost investor confidence;
    “Extractive Sector
    Diamonds and platinum are the only sub-sectors designated as ‘extractive.’
    Accordingly, the proposed Amendments will confine the 51/49 Indigenisation threshold to only the two minerals, namely diamonds and platinum, in the extractive sector.
    The 51/49 threshold will not apply to the rest of the extractive sector, nor will it apply to the other sectors of the economy, which will be open to any investor regardless of nationality.”

    • Madara

      so do you have to be black or just zimbabwean to count as the 51?

  • Hombarume

    For him to be out of state house is more painful that jail.
    I believe when he looks at his calendar his heart jumps three times the normal rate.

  • Hombarume

    I support you on these points, but not on Rand. Lets get our money directly from the suppliers – Germany. Germany prints all these monies. Unfortunately, thats the truth of our lives.
    On Farmers, dont invite. Let those who want to come, come. Inviting them send a sad message. Zanu / Mugabe failed and not the farmers. Lets not be fooled, Mugabe sold the economy with ESAP not land reform. People who grabbed land where those made redundant by ESAP. Tell us one farm produce in short supply since 2000. Lets encourage commercial farming rather than subsistence. But you farm what has market. They should look for market and farm that. Zimboz can do that.

    • betty

      True haaa Rand kwete. USD is way better

  • Sibanda

    Minister Chinamatsa and team must be commended. What the budget has focused on is quick-wins in the new fiscal year.

    We must work on long-term strategies for sustainable turn-around solutions.

    The implementation process must be pursued with vigour in response to the President’s clarion call to hit the ground running.

    Communication of time-line targets so that expectations are made to be realistic are necessary on an on-going.
    We lift our heads for honest on key issues:
    + Need for discipline
    +Stringent compliance with approved votes
    + Reduces embassies and have consuls where appropiate
    + Gravy train of cars for everyone
    +Corruption- zero tolerance
    + Productivity in agriculture
    + Need to respond to Audits
    + Privatization of SOEs (State – State Owned Enterprises and Parastatals
    + Huge shopping delegates limits
    + Use of Economy class on official flights

    Well done !!!

  • Chibaba Chacho

    Looks good on paper. Now we wait to see if these changes will have a positive effect on the general populace. Other issues that i thought the Minister was going to tackle are , Cash shortages, and ease of doing business. Also the country’s fuel taxes and levies are way too high as compared to our neighbors. This i also thought was going to be addressed. However Not bad as compared to previous presentations .

  • Cde Mzvinavhu(Prof)

    This austerity measures government budget augurs well for our economic recovery. The stern fight against corruption will complement this good budget. But those who imposed sanctions against our economy because of our legitimate land reform should lift their sanctions unconditionally. Investors may be hesitant or delay coming because of the negative sanctions overhang. Our positive government trajectory needs simultaneous international financial community assistance to bear economic fruits. Sanctions must go.

    • Madara

      dude, what sanctions?
      and herald why did you remove my comment?
      you are getting worse than ever before with your censorship. is mzilanvhuhu one of your moderators now?

      • Cde Mzvinavhu(Prof)

        Are you Zimbabwean ? Why do you continue to refuse the fact that sanctions significantly contributed also to our current economic nadir,among other factors? Let us unite in supporting the new government trajectory without refusing to denounce sanctions. Those who imposed them have never said sanctions were just a hoax. Ko uri kurasika papi iwe Madara?

        • succuba

          Madara asked you a question… why did you not answer him?

        • Madara

          the sanctions you are thinking about were on a few individuals only.
          its like… PnP decides to not let you shop at their stores anymore because you made a scene… and then you complain and say that your whole family now cant eat because you arent allowed into the PnP anymore.
          herald… again… what is the point in removing this comment?

  • garwe

    i don’t understand why Zimbos we like to wear Suits and look all European . For me this is poor

    • Madara

      how so?

    • Cde Mzvinavhu(Prof)

      Are you indicting us for communicating in English also , instead of Ndau ? What is your beef really? Saka unoda kuti tirege even kufamba ne mota nhai? Kkkkkkkki. Next you will ask why some Zimbabweans are Christians when Jews are not Christians. Kkkkiiiii?