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Saturday, October 31, 2020

Towards a people centered National Budget

The COVID-19 pandemic has had devastating effects on all economies of the world with Zimbabwe being no exception.  Apart from COVID-19, Zimbabwe is grappling with climatic-induced drought, macro-economic shocks and the effects of Cyclone Idai. All sectors of the economy have been affected by the COVID – 19 pandemic, especially the informal sector, agriculture, transport, manufacturing, tourism and mining.  About 7.7 million (approximately half of the population) need food assistance, and at least 1.7 million require additional social protection (IMF, September 2020). The advent of COVID-19 has sharpened inequalities, worsened poverty and plunged the country into staggering debt.

Zimbabwe’s poor and vulnerable populations, particularly, women and youth are struggling to cope. Overwhelmed public health systems and weak social protection mechanisms have culminated in the shifting of public responsibilities to already overstretched families and communities. Yet we know and understand that the failure of Zimbabwe to respond to major crises is a result of deliberate policy and political choices.  Overtaxing burdened and marginalised groups, prolonged austerity measures, mismanagement of public resources, lack of transparency and accountability in the extractives sector, illicit financial flows, lack of fiscal discipline and unstainable debt have exacerbated the economic quagmire the country finds itself in. High maternal mortality rates, lack of access to water, housing, energy and other basic amenities for the majority of Zimbabwe’s population is a wake-up call for Zimbabwe to change course towards justice and equality.

It is time that Zimbabwe responds to all these crises with a People Centred budget that increases developmental outcomes for the poorest and most vulnerable in society. It is time that Zimbabwe makes deliberate efforts to effectively promote participatory budgeting that puts citizens in charge of how the government spends their resources. The United Nations considers participatory budgeting as democratic “best practice”.  It is time that the government takes into account key propositions from the grassroots for consideration in the 2021 budget formulation process and makes the necessary policy changes to facilitate a people’s budget. Cosmetic consultations will result in the same elitist process that advances the interests of a few to the detriment of the masses.

A people centred budget will;

  • Restore fairness to the tax code, strengthen social protection measures, and ensure long-term fiscal sustainability.
  • Promote resuscitation of industry and commerce, economic recovery and growth and creation of employment.
  • Facilitate economic opportunity for all segments of the population by promoting affordable education and health care whilst increasing disposable incomes of low wage earners.
  • Increase tax progressivity and adequacy by implementing higher marginal tax rates for high income earners and corporates, eliminating inefficient corporate tax loopholes, removing unjustifiable tax incentives to large conglomerates and reducing the tax burden on marginalised groups like women, the youth and people living with disabilities.
  • Foster Effective debt management – The Mid-Term Policy Review Statement highlighted that Zimbabwe had no budget deficit in the first half of 2020 yet poverty has increased exponentially. The People’s Budget would promote fiscal responsibility and reach a sustainable public-debt trajectory by raising revenue through Domestic Resource Mobilisation (DRM) progressively.

The expiry of the Transitional Stabilisation Plan with its “Austerity for Prosperity” measures is a welcome development. The new Five Year National Development Strategy needs to reinforce disaster preparedness and emergency response mechanisms that facilitate government capacity to respond to crisis effectively and timeously.

There is need for an inclusive development trajectory for Zimbabwe which has faced decades of isolation, debt and economic malaise. Three key imperatives come to mind as Zimbabwe considers how public expenditure can be mobilised to restore the country’s fortunes in the post-covid era.  These include efforts to:

  • Combat resource leakages resulting from corruption, illicit financial flows and diversion of public resources through robust oversight, transparency and accountability
  • Provide comprehensive social protection mechanisms to cushion vulnerable groups with special attention on women, youth, children, people with disabilities and the elderly
  • Decriminalise and facilitate the inclusion of working Zimbabweans subsisting in the informal economy through income substitution, procurement quotas for public goods and services as well as smart investments in inclusive financing and upskilling.

We can work together to change the narrative and discourse on Zimbabwe’s story. A budget which is all encompassing in rhetoric and implementation can result in the realisation of a more just and equitable society capable of providing the economic resources for all Zimbabweans to live in dignity.

Janet Zhou is the Executive Director of the Zimbabwe Coalition on Debt and Development

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