Mutare Central legislator Innocent Gonese has told Finance Minister Mthuli Ncube to be real with his budget, arguing that people have lost confidence in the local currency.
Minister Mthuli Ncube has insisted on the local currency despite calls for dollarisation from various sectors.
This is also despite the fact that most goods and services are now priced in foreign currency.
Speaking during debate on the Finance 2022 Bill, Gonese, a seasoned legislator said the budget is anti-people and that treasury should be real.
Below is the full text of Honourable Gonese debate in the National Assembly.
‘’Thank you, Madam Speaker. The 2022 National Budget is anti-people. I am not happy with the Budget for various reasons which I am going to outline in my contribution. Madam Speaker, we would have expected the Honourable Minister to come up with a pro-poor budget aimed at poverty reduction.
‘’As we speak, it is common cause that the majority of the people of Zimbabwe are living a life of destitution. People are impoverished. This is because over the last few years when we were going though economic turmoil, people are poor, there is a lot of poverty, people cannot make ends meet; they cannot bank and bring food on the table.
‘’The first point I want to make Madam Speaker is that the Honourable Minister should be real. The reality of the situation in Zimbabwe is that people do not have confidence in the Zimbabwean dollar, and this is the reason why there is the parallel market. It is because of the confidence.
‘’I am not an economist, but I believe better in common sense and the people of Zimbabwe also have got common sense. If you just go on the streets Madam Speaker, you should be aware that if you ask for prices from vendors, whether they are selling tomatoes, bananas or even wild fruits, they are always quoting dollar for so much because they believe in the currency of the United States of America and not in our own currency.
‘’I believe that the Honourable Minister should be brave enough to tackle that elephant in the horn. If we go down memory lane in 2019, I think it was Statutory Instrument 142 of 2019 which deemed the Zimbabwean dollar to be the sole legal tender in the country and outlawed the use of multi-currencies.
‘’However last year, the Honourable Minister through the Exchange Control Regulations reneged on that officially after realisation that people have continued using the USD. The first point I want to make is that there have been calls from various quotas, both from economists and non-economists that the way to go is to accept that the dollarisation, the Bond Note as it was called then was trading at about 1:3.
‘’I remember there was a time when members of the Zimbabwean Executive were boasting that the RTGS was the strongest currency in the region, that is at the time it was trading at 1:9 but where is it now? Officially it has gone above 100 but in the real world where the majority of transactions are taking place, it is trading at 1:180 if you are lucky otherwise it is close to hitting the 1:200 mark.
‘’Even at the official auction rate, it has now gone above 100 after a long time when it had been artificially pegged at around 89. My submission Madam Speaker is that the Honourable Minister should eat the humble pie and accept that it was a brilliant idea to say that firstly, we are going to have exclusive use of the Zimbabwean dollar, only to backtrack and say that no, we are going to allow limited use of the United States dollar.
‘’The reality Madam Speaker is that if you look at one even if we had been in the House, everyone in their pocket has got US dollars. The reason is that no one believes in the fiction that the Zimbabwean dollar is a valuable currency. People do not believe in it at all, even the government itself.
‘’When you look at what they have done in respect of our bonuses, yes, it is going to benefit pensioners, civil servants but on the other hand, when you look at the other side of the coin, it is an admission that the Zimbabwean dollar has lost its value.
‘’People say they do not want it. Teachers unions, doctors, nurses and all civil servants have been saying that they want their salaries to be paid in US dollars. Why is it so? Madam Speaker, when you look at the provision that people are going to be paid bonuses, it is not being very beneficial because I was hearing from Mutare where I come from, that people have been stranded in queues, sleeping overnight waiting for the disbursement of the money. Some of the banks were saying what was put on paper in the banks does not match the physical cash that they got.
‘’The long and short of it Madam Speaker, is that government itself is not able to avail sufficient dollars, the reason being that people are withholding their dollars. People are putting their dollars under the pillow.
‘’Not many people are keen to trade on the market because they know of the consequences as a result of our policy inconsistencies. We had in the past people losing their money in banks, so people are very reluctant to put their money in banks.
‘’Where they have got a choice, they would rather be comfortable putting it under the pillow, the mattresses at the risk of being robbed. Robbers have been targeting people whom they suspect to have money, but the bottom line is, if the Honourable Minister was to bite the words and accept that this experiment with de-dollarisation has not really worked.
‘’Go back to the drawing board, wait for an opportune time where production has increased, where we have dealt with the other economic fundamentals, that will then be the appropriate time when you can say that we can now revert to the use of our own local currency.
‘’I know that you can be proud as Zimbabweans that we want to use our own currency but at the end of the day, if people do not have confidence in it, it defeats the whole purpose because we will just be maintaining the fiction that our base currency is the Zimbabwean dollar but the majority of transactions are being conducted using a currency which is not our own.
‘’My main point is that this Budget is not going to achieve the intended objective because as it is, it is now close to $1 trillion. The reality is that it has been going up over the years but in real terms, you may find out that there have been no real increases because it is just a manifestation of inflationary pressures of the inflation that we continue having in the country. I believe that this budget is not going to curb the issue of inflation. It will continue unabated, and it will be fuelled by activities on the parallel market.
‘’I know that a lot of people want to blame traders and so on, but my respective view is that the majority of people, including government itself do not have confidence in the currency itself.
‘’That is the reason why so many measures are being implemented, even the punitive tax on cellphones is pegged in US dollars. Nothing is being pegged in Zimbabwean dollars. If you look at when people are importing goods, duties are now levied in US dollars.
‘’Why do we not just go the whole way and accept that at this point in time people do not believe in the Zimbabwean dollar?
Having said that Madam Speaker, I will just deal with a few other issues which I think are very critical in our country.
‘’The first one relates to the Health Budget. I think that it is important for the Minister to really clarify what is the correct position. From my understanding in the presentation, it was stated that Health be allocated 14.9% of the Budget but some analysts claim that this $111.7 billion, unfortunately I have not had site of the Blue Book myself, so I do not know of the actual figure which had been allocated to the Ministry of Health.
‘’It is important for the Honourable Minister to clarify this one because it has been stated by some analysts that in fact that amount translates to 12.7% of the Budget which will then fall short of the Abuja Declaration. If it is really 14.9%, then we are getting closer to the target but that needs to be clarified. The most important thing is the fact that these releases – it is an issue that has been raised by those that have spoken before me, I do not know why we continue to have this problem whereby the 30th of September, most ministries do not receive half of the bids.
‘’In terms of the releases, it is important for the Hon. Minister not to take the people of Zimbabwe and Parliament for granted. It is imperative that whatever has been allocated should be disbursed as soon as possible so that we do not continue having this scenario where for example as at the 30th of September, the majority of ministries would have not received their money.
‘’The last point that I am going to talk about relates to children. Children are the future of this country; they are the future leaders and parents. I believe that ministries which are dealing with children like Health, Public Service and Education should have more money allocated to them in respect of issues relating directly to the children themselves. ‘
‘’We have issues of BEAM under the Public Service and we have had scenarios where monies have not been disbursed timesouly and it is important that when the Minister deals with his allocations, the monies are not just inadequate but in addition to that, they are timely released so that the monies can serve the intended objective.
‘’It is also important that we have sectors like the Children’s Parliament. We have a situation where it is not getting enough budgetary support. We need to have more interaction between the main Parliament and the Children’s Parliament.
‘’Recently we had the formation of the Child Rights Caucus and the reason is because it was realised that issues relating to children have not been adequately dealt with. We have got a scenario where children are half of the population but the allocations of the Budget in relation to child activities is only about 10%.
‘’We now need to have a matching of what is allocated to children and the percentage of the children. Having said that, I think it is important that the Honourable Minister goes back to the drawing board and attends to the fundamental issues which have been bedevilling our economy.
‘’It is only then that we will be able to have economic recovery. If we continue hiding behind a finger we will not get anywhere. The reality of the situation is that the people of Zimbabwe do not have any confidence whatsoever in the Zimbabwean dollar. It is important that confidence should be restored and before it is restored, let use a stable currency so that if we have our budget crafted in US$, we know that in January we would have more or less the same value in December and not the current situation. I rest my case,’’ he said.
