ZIMBABWE – Finance minister Patrick Chinamasa yesterday unveiled a flat US$4 billion budget for 2016, with revenues expected at US$3,9 billion. The minister said the projected US$150 million deficit, about 1,1% of GDP, would be funded from local borrowings, risking crowding out the private sector although he denied it.
The peanuts US$4 billion budget — compared to the fiscal year 2015’s standstill US$4,1 billion — is far smaller than annual turnovers of South Africa’s two largest supermarket chain groups, Shoprite Checkers and Pick n Pay, which also has operations in Zimbabwe. Shoprite has quit the Zimbawean market. As South Africa’s second largest supermarket chain store, Pick n Pay’s 2015 annual turnover is R66,9 billion (about US$4,7 billion). The Shoprite group, Africa’s largest food retailer, reported a turnover of R113,694 billion (about US$8 billion) for the year ended June 2015.
Imagine this: at Independence in 1980, Zimbabwe was the most industrialised country in Sub-Saharan Africa after South Africa and its currency was not only stronger than the South African rand, but also the United States dollar.
However, Zimbabwe has undergone serious regression since 2000, through a period of unprecedented hyperinflation and an attendant economic meltdown.
To make matters worse, Zimbabwe no longer has a currency of its own; it uses other countries’ units and therefore no monetary sovereignty. All this largely due to mismanagement and misrule. This is a tragedy for a rich country with so many educated and competent people, but run like a derelict farm or chaotic spaza shop!
Chinamasa’s budget merely confirms the fiscal crisis gripping government, itself a reflection of economic regression. For the past 15 years, Zimbabwe has been backsliding and this is evident in its key economic indicators.
In 1980, Zimbabwe was only second to South Africa in the region in terms of economic development and size of budget. Now, after extended periods of maladministration, its budget is smaller than that of all its neighbours — Botswana, Zambia, Mozambique and, of course, South Africa.
Botswana’s budget is about US$5 billion, Zambia (US$4,7 billion), Mozambique (US$6,3 billion) and South Africa around US$80 billion, 20 times bigger.
Yet Botswana was a village at independence in 1966, with only 10km of tarred road and no local currency. Its annual revenues were merely US$1 million.
Zambia melted from the heat of mismanagement under Kenneth Kaunda, but has now recovered. South Africa, which has so far avoided post-colonial Africa’s disastrous trajectory, is still going strong despite shaky growth and rumblings of discontent.
President Robert Mugabe’s visit to Maputo in June for Mozambique’s 40th independence anniversary should have been an eye-opener for him. The Maputo he lived in during the 1970s is so different from the Maputo of today. Then under Samora Machel it was a socialist backwater with food shortages, scant traffic on the streets and dilapidated buildings left by the Portuguese after they hurriedly exited following defeat in 1975, but now it is a vibrant economic hub. By contrast, the Harare that Mugabe lived in before Independence was the heart of a vibrant economy which, despite the liberation war, full international sanctions and regional hostilities, thrived even if the subaltern majority was marginalised.
The Harare of today is the centre of economic implosion, with intensifying company closures, job losses and unemployment on a massive scale, a hive of informal activities and teeming vendors. It symbolises deterioration and decay in many ways.
Compared to its neighbours, Zimbabwe got a paltry US$545 million in FDI last year while Mozambique received US$4,9 billion, nearly nine times more, pacesetter South Africa US$5,7 billion and Zambia US$2,4 billion.
Zimbabwe ranks 171 out of 189 countries on the latest Ease of Doing Business index, while it declined one place to 125th out of 140 countries in the latest Global Competitiveness Index compiled by the World Economic Forum. This is because of how the country is ruled. Chinamasa’s budget is a sobering reminder of how far back Zimbabwe has gone, while its neighbours steadily progressed.