Business leaders, experts commend 2024 National Budget
Oliver Kazunga Senior Business Reporter
ECONOMIC analysts and business leaders have commended the 2024 National Budget delivered by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube on Thursday, saying it centres on mitigating the headwinds that could threaten the growth of key economic sectors.
Agriculture, mining, tourism and manufacturing are Zimbabwe’s major economic sectors expected to anchor the country’s progress towards the envisaged upper-middle-income society status by 2030.
Economic analysts said the budget and its accompanying fiscal policy statement would promote economic stability and increase Government revenues.
Economist and Reserve Bank of Zimbabwe Monetary Policy Committee Member Mr Persistence Gwanyanya said: “It gives me confidence when the Treasury prioritises growth with stability, especially at this time when we are faced with economic headwinds, global and domestic, that threaten the momentum that we have now started seeing on real economic activity.
“We would be shaken as a country by geopolitical factors; the slowdown in the global economy is due to a fall in international commodity prices. That’s why it gives me confidence when the budget is centred around maintaining growth and stability in real economic activity.
“We have seen progress in terms of the real economic activities, and that progress is coming out from agriculture, mining, and tourism, which sectors have to be promoted.”
The unprecedented tightening of global monetary conditions in response to decades-high inflation levels has slowed the pace of global economic recovery.
Consequently, the International Monetary Fund’s World Economic Outlook forecast for October 2023 projects global growth to slow down from 3,5 percent estimated in 2022, to three percent this year, and 2,9 percent in 2024.
Mr Gwanyanya said in the past five years, the Government has been investing in interventions that promote economic growth and recovery, prioritising key sectors of the economy.
In light of the predicted lower rainfall induced by El Nino, he said the investment in climate-proof technology that the Government has invested in agriculture would be bearing fruit as far as mitigating the adverse effects of the envisaged dry weather conditions in the present summer cropping season.
“We have made investments that are necessary to mitigate the effects of El Nino this year.
“The irrigation infrastructure and the conservation agriculture methods are seen as supporting the economy faced with the El Nino drought. These are investments that are starting now to show us why they were necessary when the Government embarked on them,” he said.
In the 2024 national budget, Prof Ncube pointed out that the country has achieved national food security through its agriculture support model, and thus going forward into next year, the thrust is on consolidating the gains achieved so far.
Against this background, the Government allocated $4,3 trillion to the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development to spearhead the implementation of the Agriculture and Food Systems Transformation Strategy.
Turning to the mining industry, Mr Gwanyanya said: “In the mining sector, we have seen quite a lot of activities including increased production despite the fall in mineral prices.
“Although revenue is going to be affected because of the fall in mineral prices on the international market, this would not be as much as in the case where production could have been limited.”
Zimbabwe Farmers Union executive director Mr Paul Zakariya hailed the Treasury for the $4,3 trillion allocation to the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development saying this would go a long way in spearheading activities under that ministry’s purview.
“Most of the funds allocated to ministries are for recurrent costs within the ministries and ministries themselves to meet operational cost to sustain the ministry. It’s good that the funding allocated to the ministry is going to agriculture to support various activities including those by extension officers so that they are present and active on the ground as well as for report writing, capturing information in real time.
“All that is very important is also farmer training. So, supporting agriculture from a service point of view, the ministry would be adequately financed to roll out and implement its mandate,” he said.
To support smallholder and subsistence farmers in the delivery of grain to the Grain Marketing Board and other commercial buyers, Prof Ncube proposed to review the tax-exempt threshold on withholding tax on agricultural commodities that include soya beans, sunflower, groundnuts and cotton seed from US$1 000 per annum to US$5 000 or local currency equivalent.
“We expected more in as far as that is concerned actually, we were expecting the minister to waiver the withholding tax component completely so that the farmers get 100 percent of the value of their sales.
“We are saying this because there are so many competing expenses that our farmers are having to incur until they eventually have the commodities (soya, sunflower) to sell.
“Energy costs are very high at the moment . . . there is also the IMMT which is charged and now if you levy another withholding tax at 30 percent, never mind the threshold that already spells disaster to the farmer,” he said.
Zimbabwe Commercial Farmers Union president Dr Shadreck Makombe said from the $4,3 trillion vote to the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development, the bulk of the funding should be allocated to irrigation development.
“I am imploring the ministry to look at the capacitation of irrigation on account that rainfall is no longer as we expected in the past. We are now talking of irrigation.
“In light of uncertainties such as the predicted El-Nino, we should mitigate such a scenario before we are found wanting,” he said.
The Confederation of Zimbabwe Industries president Mr Kurai Matsheza said the 2024 national budget would see the Government improving on its revenue enhancement measures.
“For example, only traders registered for Value Added Tax purposes and are in possession of valid tax clearance certificates will be eligible to procure goods from manufacturers, such a policy will improve the revenue base for the Government,” he said.