1559: Prof Ncube has finished presenting his budget statement. That concludes our updates.
1558: In conclusion, this 2022 National Budget seeks to buttress the growth trajectory established in 2021, and enable the economy to build resilience against shocks, including the COVID-19 pandemic. We endeavour to execute the Budget without wastages, delays and with timeliness. The Budget implements the NDS1 objectives which are being carefully monitored and evaluated through the Implementation and Evaluation Framework. And with unity of purpose and productive cooperation, Vision 2030 is attainable.
1555: Whereas excise duty in foreign currency is payable on alcoholic beverages, tobacco and cigarettes, other excisable products that include telephone airtime, data and pre-owned motor vehicles, are liable to excise duty in local currency. In order to ensure fairness and equity in the tax treatment of excisable products, excise duty will be levied in the currency of trade. Current legislation provides for the warehousing and securing of goods in appointed and licenced bonded warehouse facilities, without payment of duty, subject to other prescribed conditions.
Goods imported into bonded warehouses must be cleared within a maximum period of 2 years. Pre-owned vehicles imported into bond constitute idle capital which can be productively utilised elsewhere. In other cases, funds for the purchase of such vehicles are obtained on the parallel market, thereby perpetuating speculative and arbitrage opportunities. I, therefore, propose to preclude importation of pre-owned motor vehicles from goods that can be imported into bond.
I, further, propose that, in the case of pre-owned vehicles that are already in bonded warehouses, such vehicles should be entered into consumption within 6 months beginning 1 December 2021, failure of which such vehicles shall be forfeited to the State.
1548: I also propose to review the local currency tax-free bonus threshold from ZWL 25 000 to ZWL 100 000 and the foreign currency tax-free bonus threshold from US$ 320 to US$ 700, with effect from 1 November 2021.
1545: In order to benchmark excise tax rates with the practice in the region, thereby curbing illicit flows and also mobilise additional revenue to the Fiscus, I propose to increase excise duty on cigarettes from 20% + US$5.00/1000 cigarettes to 25% + US$5.00/1000. I, further, propose to introduce a flat rate of excise duty on energy drinks at a rate of US$0.05/litre, or the local currency equivalent. Incidences of non-communicable diseases, in particular, cancer, diabetes and hypertension are on the increase.
Additional funds generated from the review of excise duty on cigarettes and energy drinks will be ring-fenced and appropriated from the Consolidated Revenue Fund, towards treatment and support of cancer, diabetes and hypertension patients through the Non-Communicable Diseases Fund.
1544: In order to augment the supply of raw milk, mindful of the need revitalise the dairy industry, I propose to extend duty suspension on minimum quantities of milk powder for the year 2022. As a quid pro quo, dairy processors are expected to increase support to out-grower schemes with a view to build the stock of dairy herd, in order to increase raw milk production. Furthermore, dairy processors are expected to increase uptake of raw milk from smallholder farmers.
In line with interventions proposed in NDS1 to improve performance in the dairy value chain, I propose to introduce a levy of 5% on the value of imported dairy products. The funds will be ring-fenced for re-capitalising the Dairy Revitalisation Fund, targeted at growth and development of the dairy sector by increasing the national dairy herd, enhancing competitiveness of the dairy sector, support modernisation and standardisation of local milk production.
Funds will be disbursed from the Consolidated Revenue Fund to smallholder farmers at a concessionary interest rate, in order to ensure sustainability of the Fund, as well as optimising growth of the sector. Furthermore, in order to guarantee growth of the sector, a minimum of 80% of the funds will be utilised towards procurement of the dairy herd.
1532: The 2022 National Budget has allocated, ZWL$117.7 billion to the Ministry of Health and Child Care which represents 14.9% of total expenditures
1520: The Budget allocates ZWL$60.8 billion to the Ministry of Transport and Infrastructural Development.
1516: The 2022 National Budget is, therefore, allocating ZWL$7.8 billion to the Ministry of Youth, Sport, Arts and Recreation.
1515: The 2022 National Budget has allocated ZWL$3.7 billion to the Ministry of Environment, Climate, Tourism and Hospitality Industry.
1514: The Budget, therefore, seeks to facilitate a shift towards production of high value manufactured products which contribute more to output, export earnings and create decent jobs. To this end, a provision of ZWL$3.9 billion has been allocated to the Ministry of Industry and Commerce. Some of the resources will go towards the following programmes and projects:
1513: Growth in mining is estimated to reach 3.4% in 2021, on account of improved performance by all minerals, as well favourable international mineral prices, on the back of strong global demand and ongoing economic recovery. Going forward, the country will, therefore, continue to leverage its mineral resources in order to achieve the desired mining growth of 8% in 2022 and in line with the US$12 billion mining industry by 2023. In order to attain this growth target, the Budget has a provision of ZWL$3 billion to the Ministry of Mines and Mining Development.
1512: The thrust under the 2022 National Budget is to surpass the 2021 production levels through implementation of the key tenets of the Agriculture Recovery Plan (2020-23). Based on the current agriculture financing model, Government will finance the Agriculture Productive Social Protection Scheme for crops and livestock (which targets vulnerable households) while banks will fund commercial farming activities, through the National Enhanced Agriculture Productivity Scheme (NEAPS), with Government only providing guarantees on a risk sharing basis.
Consequently, an allocation of ZWL$124 billion to the Ministry of Lands, Agriculture, Water, Fisheries, Climate and Rural Development has been provided under this Budget
1507: Consistent with a GDP growth projection of 5.5% in 2022, total revenue collections are projected at ZWL$850.8 billion (16.8% of GDP). Collections are projected to steadily increase to 17.6% of GDP in 2023, before stabilising at 17.4% in 2024
1504: The state of public finances has improved significantly, consistent with the 2021 National Budget objectives and targets. For the period January to September, revenue collections were ZWL$317.4 billion against expenditures of ZWL$7 billion, giving a deficit of ZWL$34.3 billion. By end of the year, a narrower deficit of ZWL$14 billion is projected, to be entirely funded through domestic market borrowing.
1503: Merchandise imports increased by 27.3% to US$4 194.7 million in the first nine months of 2021 from US$3 294.4 million for the comparable period in 2020. Fuel, machinery and raw material imports accounted for this increase.
1502: Merchandise exports increased by 19.2% to US$4 053.4 million recorded in the first nine months of 2021, from US$3 400.3 million in 2020, spurred by increases in agriculture and mineral exports, while manufactured exports remained subdued.
1502: The country’s external sector position remains strong, with the current account maintaining a surplus. Preliminary estimates show that the current account balance slightly narrowed, from a surplus of US$688.2 million in the first nine months of 2020, to a surplus of US$684.4 million for the same period in 2021.
1459: Annual inflation continued to decline during the greater part of 2021 to register 54.5% by October 2021 compared to 471.3% recorded during the same period last year. The disinflationary path was underpinned by both tight fiscal and monetary policies.
1458: In 2022, the economy is projected to grow by 5.5%, underpinned by higher output in mining, manufacturing, agriculture, construction as well as the accommodation and food services (tourism) sector.
1457: Domestic GDP growth for 2021 is estimated to remain strong at 7.8%, mainly on account of the good 2020/21 agriculture season, higher international mineral commodity prices, a stable macroeconomic environment that facilitated domestication of some value chains and better management of the COVID-19 pandemic.
1456: In 2021, Sub-Saharan Africa is expected to grow on average by 3.7%, lower than the global growth rate of 5.9%, amid COVID-19 restrictive measures, slow vaccination programmes, limited fiscal space, growing debt burden and climate changes impact.
1455: The 2022 National Budget is the second annual fiscal plan Government is using to implement the National Development Strategy 1: 2021-2025. As a central policy document, it provides an opportunity for Government to refine and refocus its priorities in order to advance the economic reforms, which were started in 2018 with the launch of the Transitional Stabilisation Programme (2018-20).
1453: The budget’s theme is ‘Reinforcing Sustainable Economic Recovery and Resilience’
1451: Prof Ncube has begun his address.
1434: President Mnangagwa has arrived at Parliament for the 2022 Budget Presentation.
1424: VP Constantino Chiwenga has arrived at Parliament for the 2022 Budget Presentation.
1422: Minister of Finance and Economic Development Professor Mthuli Ncube has arrived.
1421: We are at Parliament for the Budget Presentation.