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Monday, November 30, 2020

Budget should focus on social protection

The 2021 National Budget should focus on providing sufficient social protection to distressed households affected by the prevailing economic conditions, which have been worsened by the coronavirus pandemic, experts have counselled.

Prior to the Covid-19 outbreak, Zimbabwe was already beset by a cocktail of economic challenges including high inflation and unemployment levels, a rapidly weakening currency and growing poverty, which combined to deliver a crushing blow to vulnerable households.

Speaking separately during a recent breakfast meeting to discuss the 2020 Pre-Budget Strategy Paper (BSP) between the Zimbabwe Coalition on Debt and Development, civil society and the Parliamentary Portfolio Committee on Budget, experts urged the government to deploy budgetary surpluses towards assisting poor households.

The BSP was unveiled on October 16 at a Harare hotel.

Finance Minister Professor Mthuli Ncube has pegged his economic recovery plan on balancing the government’s books and Treasury has since recorded successive surpluses.

However, little of the excess revenue has been deployed towards providing the much-needed relief to vulnerable households or improving the salaries of public sector workers, in spite of the debilitating economic conditions. 

Founding Director of the Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ) Dr Godfrey Kanyenze said the successive surpluses amassed by Treasury should go towards providing adequate social protection to the vulnerable and improving the working conditions of government workers.

“See how we are talking about the narrative surpluses, which is focused on quantitative targets,” said Dr Kanyenze.

“We are saying we want a balanced budget; but who said a balanced budget is the best thing?

“You can balance the budget like what we have done now, but at what cost?

“Because at the same time you have incapacitated the civil service.

“Now you see the irony?

“The Minister is going to the rooftops shouting as loud as possible about surpluses; even the budget strategy paper is celebrating surpluses and that employment costs have gone down below 50 percent (of revenue), but these are quantitative targets.”

He said by cutting on employment costs in an inflationary environment, government had incapacitated its workers. Focus, he said, should be on providing social protection during turbulent economic times. The Covid-19 pandemic, said Dr Kanyenze had exacerbated the living conditions of poor households.

“We are forgetting what really matters for life are the qualitative aspects.

“A surplus at what cost? An incapacitated civil service, doctors that can no longer go to work and teachers that cannot go to work.

“This is because our focus is on the wrong things, we are seized with the wrong things.

“We haven’t discussed a very important thing which is social protection.

“When COVID hit us we were already in a crisis – 7.7 million Zimbabweans were in need of food assistance, extreme poverty had gone up from 29 percent in 2018 to 34 percent by December 2019.

“We were already in a sort of serious challenge with Idai and all these drought related challenges that we had.”

Earlier this year, government announced a plan to support over 1 million households through cash transfers in order to cushion them against the effects of the Covid-19 induced national lockdown.

Dr Kanyenze, however, questioned the utility of the scheme, saying that inflation had ravaged the pay outs.

He said: “But look at social protection; we are busy talking about surpluses and celebrating surpluses and we are giving the distressed households ZWL$300.

“When I was driving here the permanent secretary was talking about this on the radio where he was saying they are giving about 200 000 families (they were targeting 1 million) ZWL$300 a month.

“The World Food Programme they give those who are food insecure US$12 per person, but here we are talking about US$3 only.”

He said some households were opting out of registering for the facility because it no longer made economic sense.

“When we were doing a comprehensive review of social protection and were talking to the people responsible for social protection, they said people do not even bother to register for the social protection,” said Dr Kanyenze.

“Why because if you want to go to the district social protection office the money you spend to travel there is more than what you are going to get.”

He said parliament should enlist the assistance of the International Labour Organisation to help properly set up a social protection system in line with international standards.

“So what should Parliament do?

“Hon (Thokozani) Khupe you know from the ILO which has come up with a social protection floor convention, which says that we should never allow social protection to go below a certain level.

“But here in Zimbabwe things just fall and salaries just collapse.

“Why are we not putting a floor, a benchmark even on wages?

“We cannot allow our people, when we have values, to go below a certain level.

“What we are seeing are medical doctors that are saying they want to work but they are incapacitated.

“So these are issues we can work using the ILO standards and they can help parliament with this.

“At ILO they have minimum income levels that they talk about including the food poverty line and the figures are there which parliament can stand on and say what we want is that wages should never go below this and social protection should never go below this.”

ZIMCODD Executive Director Janet Zhou told the meeting that vulnerable people should be at the centre of the budget-making process because they remain the most susceptible to economic shocks that come with budgeting.

She proposed an empowering form of social protection as opposed charity model, which focuses on giving small hand-outs.

“When we are talking about people we are talking about those that are vulnerable and those that are likely going to be unable to absorb the shocks that come from external or internal causes,” she said.

“These include people with disabilities, women, youths and the rural communities in the different regions as we look at the spatial issues that affect each region.

“So, people with disabilities actually have to be at the centre and they have been pushing for that.

“Also the charity model has to be addressed.

“I think we continue to talk about the charity model where we want to continue to give hand-outs; like when we give them like, for example, ZWL$300 and that is the charity model.

“But we must come up with an empowering kind of model where I was saying we should not talk about grand schemes but mundane functions of the state and the economy to ensure that people are self-reliant and self-sufficient and this includes people with disabilities and other vulnerabilities.

“This is what we should watch out for and ensure that people are at the centre of the budget-making processes.”

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