250 billion youth development fund. “This is obviously a ploy to seek approval to provide funds for Zanu (PF)’s notorious merchants of violence through the Border Gezi youth programmes,” said MDC (Tsvangirai) spokesman Nelson Chamisa.
“This government has no record of coming up with real projects that benefit the youth and it now wants Parliament to endorse overt corruption by diverting government funds for Zanu (PF) youth programmes. The regime realizes its dwindling support among the country’s youths, who constitute a significant number of the voting population. It is obviously running scared and now wants to fleece national coffers in order to train and equip the notorious militia ahead of the forthcoming rural district and urban council elections as well as the Presidential polls,” he said.
The opposition also criticized the government for failing to articulate how it intended to reduce inflation rate or to announce a substantive political framework to revive the fast-shrinking manufacturing sector.
Murerwa also announced a new tax regime, which raised the tax-free individual income tax band from $7 million to $20 million per month.
“This is a ridiculous measure by any standards, considering that the poverty datum line is now $68 million,” said Chamisa. The government also announced that all workers earning $54 million would pay 35 percent income tax, even though this salary is way below the poverty datum line.
“The fiscal policy statement provides evidence of a failed government. It is clear that the solution to Zimbabwe’s crisis of governance cannot be expected from this regime. What is needed is a new government that has the support and faith of ordinary Zimbabweans who have borne the brunt of failed economic policies and a profligate government that lives outside its means,” added Chamisa. – Staff reporter
Inflation analysis
HARARE – Retail price inflation, contrary to conventional wisdom, has been rock-steady at a factor of 11.0 (1000% p.a.) between February 2005 and June 2006. This is 4.7% per week, 22% per month, 222% per 4-month period, according to a recent analysis by economist Alex Weir.
“The Zimbabwe Dollar, as measured by the Parallel Market Rate, has been depreciating since September 2005 at a factor of 9.78 p.a. (878% p.a.), but it has been zig-zagging around that rate, and is currently on one of the more rapid legs of the zig-zag,” he explained, “while the Zimbabwe Stock Exchange in the 12 months to July 2006 has been appreciating at an average factor of 10.77 p.a. (977%), i.e. slightly under inflation.”
Weir said it was impossible to get data on average earnings, but the earnings of most Zimbabweans were diving towards earth at a suicidal rate, when measured in real or US$ terms. “The economy is contracting at a rate much higher than the usually-quoted 5% p.a.” he said.
“Hyperinflation is firmly entrenched and is not going away anytime soon, at least not without external help. But we should not become complacent about the apparently tamed and static rate of inflation over the last 18 months – this could break out of its cosy pattern at any time and take off like a rocket.” – Find the analysis, complete with pretty but effective graphs, at http://www.cd3wd.com/pwatch/
Water conference for Byo
BULAWAYO – A donor conference to finance water provision as the government continues dithering on long-term solutions to the city’s unending water problems is scheduled for next month.
Some Z$6 trillion and US$3.4 million is required for various projects to improve water supply to the city of 1.5 million people.
The government has promised, especially at every election time, to build a pipeline to bring water from Zambezi river – but the massively expensive pipeline project has never amounted to anything more than talk. – ZimOnline