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Mthuli Ncube’s 2024 budget to hit harder the country’s poor

By Staff Writer

FINANCE Minister ,Mthuli Ncube’ s 2024 National Budget blueprint is destined to expose the country’s poor citizens to deeper hardship following parliament’s failure to remove regressive clauses due to the whipping system, a civil society grouping has revealed.

The Zimbabwe Coalition on Debt and Development (ZIMCODD) acknowledges that while parliament made some amendments to the to the budget blueprint, some pertinent obstacles remained in the dossier.

“The whipping system being followed in Parliament stifles constructive debate, as shown by many regressive tax proposals that were left intact. Some of the passed regressive proposals.

“As the regressive budget proposals came into effect in January 2024, as expected, consumers witnessed significant hikes in the shelf prices of many essential goods, such as bread, rice,cooking oil, meat, and beverages. By removing the VAT zero-rating of basic commodities, the Treasury intended to increase tax revenue collections,” said ZIMCODD.

The NGOs grouping believes that this policy move disproportionately impacted the poor majority through increases in market prices arguing that economic theory posits that poor people have a high marginal propensity to consume (MPC); that is, they spend almost all of their incomes on current consumption with little savings forthe future.

ZIMCODD contends that , as such, the increase in the prices of essential goods significantly reduces their disposable incomes and reduces vulnerable groups’ access to food in a year when food availability is expected to fall as the country battles El Nino weather conditions.

“The adjustments made by the Treasury have vindicated the public’s earlier reservations about how the 2024 budget process was conducted. The process was hardly participatory; for instance,public hearings were done virtually, crowding out views of marginalized and vulnerable groups.

“Had authorities provided adequate time for budget consultations with critical stakeholders,including business, consumers, labor, and civil society, some of these anti-people and anti-growth proposals in the 2024 budget would not have been passed and become law,” the NGOs grouping said.

The NGOs grouping said while the public commends the Treasury for being spectacularly flexible in correcting this anomaly and protecting poor citizens who faced the brunt of price hikes, the public still believes these policy reversals/adjustments must be tabled before Parliament for debate and vote.
“Similarly, at least further amendments are required to make the 2024 budget pro-poor and pro-growth,” added ZIMCODD.

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