Zimbabwe’s Finance Minister Mthuli Ncube is set to present the 2024 national budget to the parliament today at the new parliament building in Mount Hampden, which was recently handed over by China. The budget presentation comes amid a challenging economic situation, marked by high inflation, low revenue, and a severe drought.
The budget is expected to balance the competing demands of social spending, debt servicing, and infrastructure development, while also maintaining fiscal discipline and macroeconomic stability. According to the Treasury, the proposed budget for 2024 is ZWL$110 trillion, a 56.54% reduction from the previous year.
Some of the key issues that the budget is likely to address are:
- Tax reforms: The budget is expected to review the controversial 2% tax on electronic transactions, which has been widely criticised as regressive and burdensome for the poor. The budget may also introduce tax incentives for productive sectors, such as agriculture, mining, and manufacturing, and lower the personal income tax rate for low-income earners.
- Currency stability: The budget is expected to reaffirm the government’s commitment to the use of the Zimbabwean dollar (ZWL$) as the sole legal tender, and to support the exchange rate management system that was introduced in June 2023. The budget may also announce measures to increase the availability of foreign currency, such as increasing exports, attracting foreign investment, and securing external loans.
- Social protection: The budget is expected to allocate more resources to social sectors, such as health, education, and social welfare, to cushion the vulnerable groups from the effects of the economic crisis and the COVID-19 pandemic. The budget may also announce initiatives to support entrepreneurship, job creation, and skills development, especially for the youth and women.
- Debt relief: The budget is expected to outline the government’s strategy to deal with its external debt, which stands at over US$8 billion, and accounts for more than 70% of the GDP. The budget may also reveal the progress of the negotiations with the International Monetary Fund (IMF), the World Bank, and other creditors, to secure debt relief and resume lending.
The budget presentation will be closely watched by the public, the private sector, the civil society, and the international community, as it will signal the government’s policy direction and priorities for the next year. The budget is also seen as a test of the government’s credibility and competence, as it seeks to restore confidence and trust in the economy.
The budget presentation will be live-streamed on the government’s official website and social media platforms, as well as on various local and international media outlets.
Source: Zwnews
