Zimbabwe Budget Highlights

Finance Minister Tendai Biti presented the budget this Thursday which centred on job development and decentralisation of the economy.

Below are the highlights

Budget to work towards equal treatment of provinces
Budget revalued and projected to $4billion up from $3.6bn due to expected diamond receipts
Overall growth for 2011 is projected to be 9.3% and 9.4% in 2012
Zimbabwe’s economy is becoming more diversified
Agriculture needs $2 billion annually if it is to realise its full potential (was allocated 226 million). There will be introduction of 3-year rolling finance strategy for agriculture in February 2012
Mining grew by 25.3% in 2011 and is expected to grow by 33% in 2012. Mining export breakdown – Platinum is 45% export gold is 24, diamonds 14% %
ICT is the fastest-growing sector of the economy
Annual Inflation started at 3.5%, then 2.5% by second quarter then 3.3%. Rent is biggest driver of inflation. Target to keep inflation under 5% in 2012.
Exports will grow by 30.2% 2011 and over 15% in 2012… 50% are mineral exports
56% of exports are going to South Africa. 6% for China and UAE each
We import 52% from SA, USA, (11%) and Kuwait (6%)
US , UK and EU remain highest development assistance partners
31% revenues coming from VAT and direct taxes are at 30%
USD100 million fund to help restore inter-bank lending and restoration of Reserve Bank as lender of of resort.
$60 million for broader industrial revitalisation
$6.5 million for livestock development
Government will pay companies to employ graduates. Fund set aside.
$800 million for capital development projects
$7 million provided for rural electrification and every province to benefit
$39.5million for water and sanitation development
$41.5 million for road infrastructure development
$5million for the fiber-optic backbone
$5.1 million for migration of ZBC to digital
$18 mil for automation of ZIMRA
$707 million for education
$445 million for maternal health care… fees etc
Government spreading the clusters of the economy so that all regions benefit
Borehole to be constructed at every school in the rural areas … easier access to water for women in the rural areas
$22 million for Census in 2012
Investment to be made in a green economy – no figure given
Duty on maize meal and cooking oil will be retained. we reached our target for strategic grain reserve
wheat will still be imported duty-free. pre-packed rice and flour and salt will attract duty
Tax-free thresh-hold up to $250/month
Bonus tax-exempt threshold is $700
VAT remittance date to move to 25th of the month
Ambulances/firefighting/water and sanitation equipment imported duty-free
Donated goods to genuine Sports association will be duty free
ZIMRA to be the only collection agent at border posts
Royalty on gold and platinum up 7% and 10% respectively

Given the resources he had, the minister has done well at trying to present balanced budget. It seeks to decentralise the economy and the creation of clusters is particularly welcome. It also laid a significant emphasis on protecting the local economy and being pro-poor.

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