By Byron Mutingwende
There is need to raise awareness on the importance of public hearings by Parliament when soliciting for the views of the citizens in the budgetary process so as to steer the trajectory of economic development for Zimbabwe.
Hon Felix Mhona, the Chairperson of the Parliamentary Portfolio Committee on Budget, Finance and Economic Development revealed this during the Community Working Group (CWGH) Pre-Budget Review Meeting held on Thursday 17 October 2019 at the Cresta Jameson Hotel in Harare.
“Stakeholders, particularly civil society organisations are encouraged to raise the awareness and importance of public hearings so that when Parliament solicits for the views of the citizens, it will get large numbers to contribute to the Budget making process.
“We need an element of ownership of the budgetary process so as to steer the trajectory of economic development for Zimbabwe. Therefore, the budgetary tool will become a holistic budget not a minister’s budget,” Hon Mhona said.
During the CWGH meeting, the issue of the cycle of budgetary process was topical. It emerged that people were not given enough time to interrogate the budgetary process in terms of their submissions. For example, Parliament will have a pre-budget seminar at the end of October and by mid November, the finance minister will be presenting his final budget, hence time to interrogate views of the people is limited.
Government has committed itself to the attainment of sustainable development and in particular to SDG 3 is one of the priority SDGs for the country.
At the continental level the country is a signatory to the Abuja Declaration of 2001; the Addis Ababa Declaration of 2006 on community health; the 2008 Ouagadougou Declaration on Primary Health Care and Health Systems in Africa; and the 2012 Tunis Declaration on Value for money, Sustainability and Accountability in the Health Sector.
In providing an overview of the socio-economic context, renowned economist, Dr. Prosper Chitambara said the country is facing its worst crisis in 10 years.
“Economic growth slowed down from 4.7% in 2017 to an estimated 3.5% in 2018 against a target of 6.3% contained in the TSP. The economy remains constrained by a lack of confidence (and trust); infrastructural deficits; policy instability and inconsistencies; political instability and institutional weaknesses among others.
“According to the IMF World Economic Outlook for October 2019, the economic outlook for the country was downgraded further from an initial economic contraction of -5.2% to -7.1% for 2019 the worst in SSA,” Dr. Chitambara said.
He added that the country is in chronic high inflation and IMF estimates annual inflation rate at 300% in August 2019, making it the highest in the world.
According to ZIMSTAT, monthly inflation slowed down to 17.72% in September 2019 from 18.07% in August. Official inflation numbers only capture price developments in the formal economy in spite of the fact that the economy is now highly informalised.
In 2018, the country was classified by the World Bank as a lower middle income country with a GNI per capita of US$1,790 in 2018 up from being classified as a low income country in 2017 with a GNI of US$910. However, in 2019, the country slipped back to being a low income country.
He highlighted that healthcare costs have been on the rise with most healthcare service providers benchmarking their fees in US$ and using the prevailing exchange rate to charge for their services. This has put pressure on the public health system. Patients on medical aid are paying huge shortfalls.
In that regard, austerity measures being implemented in the country have disproportionately affected the working class and the ordinary citizens with nominal incomes remaining largely stagnant while in real terms incomes have been eroded by both rising inflation and high taxes.
Many citizens have been relegated into a life of penury, squalor, despondency, indebtedness and distress. The proportion of the working poor has increased markedly with average salaries lagging far behind the poverty datum line (PDL).
Dr. Chitambara said the health situation in the country is currently in a critical situation and has been a victim of macroeconomic austerity and the fallout from that austerity which has resulted in unstable macroeconomic situation as evidenced by the chronic high inflation as well as massive cutbacks in expenditures.
“There is pressure on the part of government from its restive civil servants to review wages to cushion them from the rampaging inflation which has seriously decimated and debauched incomes. The on-going strike by medical doctors and nurses has left the public health delivery system on the verge of complete collapse.”
He averred that the austerity thrust of government has affected social expenditures.
“Importantly, the public health sector remains grossly underfunded with public health spending accounting for a relatively small proportion of total fiscal spending. Public health sector allocation stood at 8.9% in 2019. Employment costs however constitute 70% of the total health budget. Total government expenditure on health as a percentage of total government expenditure is less than 15% (Abuja target) over the period 2012-2019. The SSA average is 13%.
“Per capita health allocation stands at about ZWL$41 in 2019; in 2018 it was US$31. Per capita health spending averages $150 in SADC. The inadequate public financing of health has resulted in an over-reliance on out-of-pocket and external financing which is highly unsustainable.”
Zimbabwe is relying more on donors for health funding particularly on reproductive health and contraceptives, which leads to risk in event of donor fatigue.
“The sources of health financing are private sector (28.4%); followed by households (25.0%); external financing (24.9%) and government (21.4%). There is an over-reliance on OOP and external financing. OOP payments by households have driven many deeper into poverty. The high dependency on external financing is unreliable, unpredictable and unsustainable. In fact, donor funding is dwindling owing to global economic constraints.
“The Free User fee Policy for pregnant women, under 5s and those aged 65 years and above has not been backed by resources and has resulted in over-crowding at the tertiary institutions. Moreover, the blanket cover does not look at ability to pay.”
Mr. Itai Rusike, the CWGH Executive Director, said historically, since 2000, his organisation has been working with the Parliamentary Portfolio Committee on Health and has aimed to increase community participation in health as its mandate states.
“One of the many ways we see communities participating is through planning and resource allocation done through the national budget making process. CWGH compiles a position paper on the National Health Budget with input from its district structures and national membership,” Mr. Rusike said.