The move seeks to reflect the situation on the ground while propping up economic sectors and restoring such public services as health and education.
Inflation rendered impractical any local currency allocations with most goods and services now being paid for in foreign currency.
However, the Zimdollar remains legal tender alongside other currencies such as the rand, British pound, pula and the euro.
The United Nations exchange rate will apply where conversion to Zimdollar or vice versa may be necessary.
Effectively, companies can now pay salaries and allowances in both foreign currency and the local unit to uplift the standard of living for Zimbabweans.
Presenting the 2009 National Budget in Harare yesterday, Acting Finance Minister Senator Patrick Chinamasa said the Budget’s main focus was to support productive sectors, stabilise inflation and restore the provision of basic public services.
A large portion of the budget — US$1,45 billion — will be directed towards recurrent expenditure while the balance will fund capital projects.
For the first time in years, the Government presented a balanced budget with a projected revenue inflow of US$1,7 billion while an additional $200 million from external partners has already been earmarked for specific projects.
Sen Chinamasa proposed to allocate US$157,8 million to address the challenges in the health sector.
The funds will be directed towards the procurement of drugs and other medical supplies, and operational expenses for Government central, provincial and district hospitals.
Local authorities and mission hospitals will also benefit.
"With this allocation, it is my expectation that our health institutions will now be able to have improved levels of essential and necessary drugs including other medical supplies."
This year’s Budget pronouncement comes against the backdrop of challenges that include rising inflation, shortage of goods and services, poor harvests and deteriorating delivery in such public services as health, water and electricity.
Zimbabwe has also not been spared from the ravages of the global economic recession.
Cde Chinamasa acknowledged the support rendered by some of the country’s external partners through the provision of medical drugs, agricultural inputs and water treatment chemicals.
Education was allocated US$149, 8 million for the construction and rehabilitation of schools and procurement of teaching material and equipment while he proposed to allocate US$16,9 million to the Zimbabwe School Examinations Council to finance the setting, conduct and marking of public examinations.
This is expected to go a long way in clearing all outstanding marking of examinations such as the 2008 Grade 7, Ordinary and Advanced Level examinations
Sen Chinamasa proposed to allocate US$47,4 million to tertiary institutions for recurrent and capital projects.
He emphasised that the Government will not entertain any expenditure outside the budget.
The multiple currency system will apply up to a time when the Zimdollar appreciates.
In the meantime, most taxes, fines for indiscipline and corruption, and import duties will be paid in foreign currency.
"Essential for shoring up the value of the Zimbabwe dollar will be the implementation of a combination of strict and painful fiscal and monetary measures that relate the Zimbabwe dollar monetary base to developments in the real sector, and the avoidance of recourse to money printing beyond the economy’s production of goods and services," he said.
This will also help ease-off inflationary pressures presently obtaining in the economy. Licensing requirements to transact in foreign currency will be simplified. – allAfrica.com
Post published in: Mining