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By Dr. Tapiwa Mashakada
The most vexing issue and an elephant in the living room is the currency and exchange rate crisis facing the country. There is no acknowledgment of the reality on the ground which is that the market has dollarized. A Zimbabwe dollar budget is a hard sell under such circumstances.
The solution is to choose one currency to use as legal tender in Zimbabwe. As long as the dual system subsists, arbitrage opportunities will spur high parallel market premiums. Moreover, the dutch auction system is being manipulated as bidders are tempted to offload some of the forex on the black market. So the 2022 budget must confront this monster head-on.
The Minister of Finance is failing to confine the usage of Special Drawing Rights (SDRs) to targeted sectors. Too many sectors will render the SDR use ineffective. My recommendation is that SDRs should be used narrowly in the following sectors:
1. Water and Sanitation
2. Municipal roads
3. Energy
4. Health and
5. Reserves
While Agriculture is the mainstay of the economy too much is being thrown into that sector which is disproportionate to the return or output.
In view of the covid pandemic, more resources must go towards health and exceed the Abuja threshold of 15%.
Most ministerial bids were rejected rendering the whole ministerial budget targets not realisable.
