As I finished reading the last week presented Zimbabwe National Budget for the 2025 fiscal year, I could hear the famous saying of Mai Chisamba Show, saying “Vamwewo, vawomberereiwo mawoko ndiwo mafungiro avo”. This is what she would say when she didn’t want to outright dismiss someone on her show when the person has gone off-topic. Did the minister go off the rails for the 2025? I mean maybe it’s easy for us since we are on the touchline to criticize players in the field. But we do have a global view, while those that are playing are concerned about getting the ball and keeping the ball.
The 2025 Zimbabwe National Budget presented by the minister, themed "Building Resilience for Sustained Economic Transformation", is presented against a backdrop of economic challenges and opportunities. The Minister of Finance acknowledges the impact of global economic headwinds and internal challenges, while highlighting the country's resilience and potential for stronger growth.
He says the budget prioritizes macroeconomic stability, particularly through fiscal consolidation and the use of scarce resources. It focuses on key sectors such as agriculture, mining, infrastructure, and human capital development. The budget also emphasizes the importance of innovation and technology, the need for a stable ZiG currency, and engagement with the international community.
Its all flowery to hear, but what does the general populous of Zimbabweans who have been reduced to vending on the streets feel about this. Allow me to poke holes a bit, representing those hustling for a dollar on the streets, or the millions scattered across the globe eager to come back home. I am sure if I off-ramp they can call me out, but here is my take.
- Over-reliance on the extractive industry: The budget heavily relies on the mining sector, especially gold and PGMs, for revenue generation and foreign currency earnings. This dependence on commodities makes the economy vulnerable to price fluctuations and external shocks. ?That’s why we can’t keep the ZiG stable, worse we are importing sweet potatoes from South Africa.
- Limited manufacturing sector: While acknowledging the importance of value addition and beneficiation, the budget does not provide substantial support for the manufacturing sector. The manufacturing industry is projected to grow by only 3.1% in 2025, and capacity utilization is estimated at 55%. This indicates a lack of focus on industrialization and moving up the value chain. ?Bottling drinking water is not manufacturing, why is it not worrying to the Minister that major grocery stores are full of South African goods? Could it be that he is happy with the import duty revenue he is getting at the expense of inflation and country instability.
- High unemployment: The budget does not adequately address the issue of high unemployment. While some initiatives target youth empowerment and skills development, there is no comprehensive strategy to create large-scale employment opportunities. The hopeful citizens still go to university but make no mistake that they have hope to find jobs in Zimbabwe. To them it’s a key to go to other countries and make a life and those that don’t breakthrough, become vendors on the streets.
- Dependence on agriculture: The budget projects a strong rebound in the agricultural sector, driven by the anticipated La Ni?a phenomenon. However, this reliance on rain-fed agriculture makes the sector vulnerable to climate change and unpredictable weather patterns. ?The sad part because of a dollarized economy, many Zimbabweans have resorted to farming Tobacco at the expense of food production.
- Debt restructuring: The budget highlights the need for debt restructuring to manage the country's debt overhang and create fiscal space. However, the success of this process depends on negotiations with creditors and the implementation of sustainable fiscal policies. ?This has the only effect of throwing the ball down the line for you to catch it. With this WaBenzi type of consumption government, debt to finance government salaries does more harm than good.
Alternatives to the Proposed Budget
If I could, I would redirect the budget towards areas that I believe would yield better results, provide the form of stability that is required in the economy. We cannot afford to continue with the consumption economy with zero production. To have an economy of middlemen playing the margins and exchange rate games is what is driving inflation and currency instability. Needless to say that the response should never be a bandage approach, but brain surgery approach.
- Diversification of the economy: To reduce reliance on commodities, the budget should prioritize the development of other sectors such as manufacturing, tourism, and technology. This can be achieved through targeted investments, incentives, and skills development programs.
- Support for the manufacturing industry: The budget should provide more substantial support for the manufacturing sector, including access to finance, tax incentives, and infrastructure development. This will promote value addition, create employment opportunities, and reduce reliance on imports. Manufacturing incentives could come in the form of tax breaks or targeted investments. Supermarkets importing from SA could be encouraged to source local, participate in funding contract growing which would improve the agriculture and manufacturing industry.
- Addressing unemployment: The budget should include a comprehensive strategy to address high unemployment, focusing on skills development, entrepreneurship, and labor-intensive industries. The challenge would be to implement a shock approach by shading unnecessary labour in the public sector, we already know that those are moonlighting. This would reduce costs on vehicles, and fuel as well. The other view is we would have more people on the streets, but reality is we already have same people on the streets trying to hustle for a dollar.
- Climate-smart agriculture: The budget should promote climate-smart agriculture practices to reduce reliance on rain-fed agriculture and enhance the sector's resilience to climate change. This can include investments in irrigation, drought-resistant crops, and climate information services. I am totally against giving title deeds to beneficiaries of the land reform program, the ninety-nine-year lease, if done properly is already a bankable title that would allow farmers to access finance. Title deeds will see a lot of farmlands being offloaded into the market by opportunist trying to cash in. Government should fund food production, provide grants to farmers in targeted sectors. Providing required restitutive relief to farmers who would have lost their produce and animals due to diseases and draught.
- Fiscal discipline: The budget should prioritize fiscal discipline and debt sustainability to manage the country's debt burden and create fiscal space for essential expenditures. This requires expenditure rationalization, revenue enhancement measures, and prudent debt management. ZIMRA system of revenue collection should be enhanced, ensure electronic information systems are implemented that require minimum human intervention. Ensure convenience and limit the need for people to physically go to ZIMRA offices, but declare and pay their taxes from their desktop.
Lessons from change makers
Several individuals have been instrumental in the economic turnaround of their respective countries. These include:
- Singapore's Lee Kuan Yew: As Prime Minister, he implemented policies that fostered economic growth, attracting foreign investment, and promoting education and innovation. This led to Singapore becoming a major financial hub with a high standard of living.
- China's Deng Xiaoping: He introduced economic reforms that opened up the Chinese economy, leading to rapid industrialization, increased trade, and substantial poverty reduction.
- Chile's Fernando Henrique Cardoso: As Finance Minister, he implemented the Real Plan, which successfully tackled hyperinflation and stabilized the Brazilian economy, paving the way for sustainable economic growth.
- Poland's Leszek Balcerowicz: As Finance Minister, he oversaw the transition from a centrally planned economy to a market economy. His "shock therapy" reforms, while initially unpopular, led to long-term economic growth and development.
- Estonia's Mart Laar: As Prime Minister, he introduced a flat tax system and other market-oriented reforms that fostered economic growth, attracting foreign investment, and promoting Estonia as a digital leader.
These Ministers implemented policies that promoted fiscal discipline, market-oriented reforms, and investments in key sectors such as education, infrastructure, and technology. They made difficult choices, including unpopular decisions, to achieve long-term economic stability and growth.
The 2025 Zimbabwe National Budget presents a mixed bag of opportunities and challenges. While it prioritizes macroeconomic stability and focuses on key sectors, it does not adequately address critical issues such as over-reliance on extractive industries, limited manufacturing capacity, high unemployment, and dependence on rain-fed agriculture.
To achieve sustainable and inclusive economic growth, the budget should be revised to include alternatives such as diversification of the economy, support for the manufacturing industry, comprehensive solutions to unemployment, climate-smart agriculture, and strict fiscal discipline.
