BULAWAYO - The 2010 Zimbabwe Budget must play a major role in accelerating and intensifying the economic recovery registered so far, an economist has said. (Pictured: Finance minister Tendai Biti)An economist from Zimbabwe National Chamber of Commerce, Kipson Gundai, said the budget should focus on restoring viability for all economic sectors, including; mining, manufacturing, agriculture, financial services, tourism and commerce. He said despite this improvement in the macro-economic environment more needed to be done to improve the country risk profile.
Notwithstanding the global economic challenges, Zimbabwe is expected to recover from the previous recession it suffered in the past decade. The growth has been buoyed by the turnaround in the political environment, improved business conditions, prudent macroeconomic management encompassing sound fiscal and monetary policies and, drastic reversal of hyperinflation conditions, he said.
Gunadi said the budget should reduce the number of people struggling to survive whose incomes are below the Poverty Datum Line (PDL), and the Food Datum Line (FDL). PDL currently stands at over US$500 per month yet the bulk of workers are earning an average of US$100 per month. The fiscal statement should seek to initiate substantive export incentives, correlated to the extent of increases in export performance, thereby maximising productivity, with concomitant reduction in unit costs, increased monetary inflows and enhanced levels of employment with special emphasis upon primary product exports and those encompassing value addition to primary products, Gundani said.
According to the economist, a conducive investment climate was vital for attracting much needed finances, hence the need to introduce meaningful incentives like income tax exempt periods. To this end, the ZNCC as the Voice of Business will continue to engage and lobby policy makers and other key stakeholders on the need for legislative reforms needed to improve the business operating environment, said Gundani. Gundai said the level of economic activity was still subdued due to a number of factors, the principal factor being liquidity constraints; hence the 2010 national budget should also seek to address the need for increased liquidity.
Post published in: Economy