FORMER Economic Planning and Investment Promotion minister Tapiwa Mashakada has accused Finance minister Mthuli Ncube of misleading President Emmerson Mnangagwa and the nation through his continued declaration of budget surpluses when the economy is on its knees.
This came as Ncube in his recent mid-term budget statement revealed that the country had had a budget surplus of $800 million.
However, Mashakada in an interview with NewsDay yesterday said it was impossible for Zimbabwe to record a budget surplus when the economy was collapsing.
“The difference between government revenue and expenditure is called the conventional deficit or surplus. This is what Prof Mthuli boasts of having eliminated. Yet eliminating the conventional deficit and achieving a surplus is meaningless. In the 2020 mid-term budget and economic review, Prof Mthuli boasted that government had recorded a budget surplus of $800 million (US$8 million). This figure is spurious,” the opposition MDC Alliance legislator said.
Mashakada said the only way government could achieve a budget surplus was by not fulfilling its obligations such as funding the health sector or other essential services and avoiding payment of domestic and foreign debts.
Currently, nurses and doctors at public institutions are on strike while the rest of the civil service is demanding US dollar salaries with government saying it is broke, but Ncube insists the economy is performing well.
“There is a book that is loved by first-year students of economics, which is aptly titled, How to Lie With Statistics. I am sure Prof Ncube frequently reads this amazing book. Yet economic management is not about metrics alone, indeed it is about the impact,” said Mashakada who served as a Cabinet minister in the unity government of 2009-2013.
“Our problem is that the government has embraced IMF/World Bank neo-liberal stabilisation programmes such as the transitional stabilisation programme (TSP). And the results of Mthuli’s economic stabilisation policies are bare for us to see. People are languishing in abject poverty due to lack of social protection. Prices of goods and services have shot through the roof. Government has created a laissez-faire economy which entails the survival of the fittest. This is wrong.”
Mashakada added: “I call upon Ncube and the entire Cabinet to stop inflicting pain and suffering on the poor people. I call upon Ncube to stop lying to the President and Cabinet that there has to be pain first and gain later. There is no such thing. The sooner ED realises he is being sold a dummy by his Finance minister, the better. History is full of stories of removal of governments caused by economic stabilisation programmes such as the TSP.
“Zimbabwe should not celebrate the dubious $800 million budget surplus that was revealed in the mid-term review. Rather, we must mourn the opportunity cost of the surplus. Economists must debunk this myth of a budget surplus in a starving nation, ravaged by poor spending on the COVID-19 response. Politics aside, government the nexus between social unrest and economic stabilisation should move swiftly to address the economic meltdown which has been aided by the TSP which was introduced in 2018.”
The economist reiterated that the TSP was the modern version of the Economic Structural Adjustment Programme of the 1991-1995 era which severely damaged the Zimbabwean economy.