Zimbabwe 2014 National Budget Statement

1. Mr Speaker Sir, in terms of Chapter 17, Section 305(1-2) of the New Constitution of Zimbabwe, read together with Section 28(1) (a) of the Public Finance Management Act Chapter 22:19, I move that leave be granted to present a Statement of the Estimated Revenues and Expenditures of the Republic of Zimbabwe for the 2014 Financial Year and to make Provisions for matters ancillary and incidental to this purpose.

2. Mr Speaker Sir, the watershed 31 July 2013 harmonised general elections are now behind us, with the new ZANU PF Government in place.
3. As is typical of any election year, economic agents had prior to elections adopted a ‘wait and see’ attitude, with the last few months before the elections witnessing an intensified liquidity squeeze in the economy, leading to weak aggregate demand.
4. This also had the effect of slowing down economic activity, with 2013 GDP growth now estimated at 3.4%, down from the earlier 5% projection. Growth was 10.6% in 2012.
5. This situation has resulted in an increasingly difficult operating environment for both Government and the private sector.
6. While it is normal for economies that emerge from hyper-inflation to experience a few years of strong growth as the “low hanging fruits” are harvested, i.e. a period of fast growth followed by a slowdown, it is quite evident, Mr Speaker Sir, that we need to put in place Confidence Building Measures to deal with the challenges at hand before the economy slides into full blown deflation.
7. Business confidence remains low and Zimbabwe’s country risk premium is still high. The result is a lack of investment and financial inflows required to drive future growth.
8. Zimbabwe’s persistent current account deficit continues to be a strain on the country’s liquidity as more funds flow out to pay for imports than are generated by exports.
9. The huge import bill has, therefore, been a source of liquidity destruction.
10. It is, however, important to point out that the negative trade balance is not a deficit in its strict sense, but mostly paid for or funded from a number of sources that include Diaspora remittances and revenue from the sale of smuggled gold.
11. It is, therefore, vitally important, Mr Speaker Sir, that both Government and the business community retain a sense of calmness and exhibit confidence in the future.
12. Given that lack of confidence is a major driver of the challenges, calm and confidence portrayed by both political and business leadership is a necessary ingredient to help build confidence throughout the economy.
13. Mr Speaker Sir, in view of the above challenges that the economy is facing, this Budget proposes to introduce various Confidence Building Measures that are necessary to move the economy along the trajectory envisaged under ZIM-ASSET, our new economic blueprint for the next five years.
14. This, Mr Speaker Sir, aims to achieve sustainable development and social equity, propelled by the judicious exploitation of the country’s abundant human and natural resource endowment.
15. The ZIM-ASSET programme also intends to accelerate the reengagement process with international financial institutions and other creditors on arrears clearance, debt relief and new financing in support of its development projects.
16. Mr Speaker Sir, the 2014 National Budget, consequently seeks to facilitate the implementation of ZIM-ASSET programmes, paying particular attention to those priorities earmarked for delivery in 2014.
17. Central to this is recovery of both public and private investment in the economy. This should anchor increased economic activity across the various productive sectors of the economy.
18. In formulating the 2014 National Budget, I also benefitted from the many submissions of various stakeholders.
19. Mr Speaker Sir, I am, therefore, indebted to the various contributors who made presentations during the consultations to champion the development agenda of this country.

20. Major inputs were received from Parliamentarians, Government Departments, and representatives of industry, farmers, labour, hospitality industry, academia, civil society, bankers, youth, women, small scale entrepreneurs and miners, among others.
21. Mr Speaker Sir, in my presentation I shall endeavour to speak to the Zimbabwean people in the language that they can understand and in this regard I stand guided by Hans Hoffman’s words of wisdom that “The ability to simplify means to eliminate the unnecessary so that the necessary can speak.”
22. This is more-so, in light of the new Government’s obligation to make a difference from the past, through ushering effective responses to the deep hopes and expectations of the electorate and indeed the public at large.
23. Allow me, Mr Speaker Sir, before turning to specific interventions, to put the 2014 National Budget in the context of both the global and domestic economic environment.

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