Preliminary position on 2009 National Budget Statement, 01 February 2009

National Budget heralds the full dollarisation of the Zimbabwean economy and paves the way for increased service charges for basic social services in-spite of the depressed financial status of the vast majority of Zimbabweans

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Budget is premised on some wrong or unattainable assumptions and does not clearly articulate how government will mobilise the necessary resources

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NANGO invites all stakeholders to a Post-Budget Reflection Meeting scheduled for February 13, 2009

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Introduction

In a Press Statement released prior to the belated announcement of the 2009 National Budget the National Association of Non-Governmental Organisations (NANGO), expressed hope for a pro-poor, gender sensitive and child friendly budget statement in sympathy with the grievous humanitarian and economic conditions confronting Zimbabweans. The National budget whilst having some positive dimensions fundamentally failed to meet these expectations. In having a broad liberalisation programme, without an allied social support framework, the budget is in many ways insensitive to the plight of more than three quarters of the Zimbabwean population currently unable to meet their basic needs or actively participate in a free market.

NANGO also anticipated the advent of the dollarisation of the economy and thus raised the expectation for government to detail how resources to support a dollarised budget would be marshaled in light of the country’s sustained poor economic performance. Again, the budget failed to give such indications apart from the specious anticipation of economy growth and double-digit inflation.

Notable highlights from the budget statement include:

· Endorsement of dollarisation

· Water and sewer to be returned to the local authorities

· Liberalisation of the economy - End to price controls

· Taxation in foreign currency

· Abolishment of monopolies

· All quasi-fiscal operations liquidated by 31 December 2008

It is notable that the budget echoed Civil Society’s long held demands for drastic actions in the following areas: inflation reduction; food security and productivity in agriculture; water management; guaranteed fuel and electricity supply; improved delivery of health and education services; infrastructure rehabilitation in transport (roads, railways and airports); improved telecommunication systems; efficiency of public enterprises; .stimulation of the productive sectors, notably agriculture, manufacturing, mining, tourism and construction among others; provision of housing - including for those in the public sector; and social protection. However, the current budget in spite of these good intentions, risks suffering the same problem of the previous budgets in which the identification of problems was not supported by a workable framework of implementation.

By and large the 2009 National Budget remains businness as usual, carrying over the retrogressive practices such as the top-down budget formulation process which inhibits citizen participation or input into decisions about how national resources will allocated and utilised. Most alarming is the age-old tradition of the defence vote receiving the greatest allocation of resources at 8% of the budget in spite of the facts that Zimbabwe is not at war.

A distressed context

The national budget has been announced at the backdrop of political uncertainty and social unrest. Development conditions in Zimbabwe are at an all time low since the attainment of Independence in 1980. Estimates indicate that between 5 and 7 million Zimbabweans will would require food aid in February and March. Meanwhile social service delivery capacities in the educational, health, social welfare, water and sanitation fields have all but dilapidated leaving the vast majority of Zimbabweans susceptible to economic shocks, hunger and disease. Many Zimbabweans have therefore been compelled by circumstances to resort to negative copying mechanisms such as the deference by families of investments in health and education to service food needs, thus jeopardizing the educational and health needs of the vast majority of children. The combined pressures of unemployment, the HIV/AIDS pandemic, high food prices and the intensive flight of millions of economic refugees to other countries have severely weakened citizens social security nets leaving more and more people even more vulnerable.

The National Budget as a budget

It remains a challenge to determine whether the National Budget Statement does indeed constitute a budget in the sense of it being an indication of the resources available for expenditure. There are very weak guarantees of the government’s ability to finance the budget. The National Budget Statement, presented by the acting Finance Minister, has been premised on revenue projections based on positive economic growth and a balanced budget. In light of this, the projected positive economic growth of 2% is expected to enable the mobilisation of resources totaling US$1.7 Billion. However, stronger indications point out to a rapidly declining foreign currency generation base, unless drastic actions such as the effective facilitation of industrial production, international investment and good governance are urgently in place. With the agricultural sector hit by shortages of inputs and the mining sector in sustained under-production and commodity prices low, the possibility of attaining a 2% growth rate are dim. This is further compounded by the decline in the global projected economic growth- the world to around 0.5%. Foreign currency generation to pay for the government operations will be problematic.

Apart from the questionable projected capacity to mobilise resources, the Budget is premised upon a negation of the reality of hyperinflation as an inhibition to the effective implementation of the Budget. The budget thus makes a wrong or unattainable assumption that Zimbabwe’s record-breaking inflation will be reduced to double digit figures in the year-end.

Contending with the Issues arising

Urban Water Supply

It is pleasing to note that the budget notes that the urban areas continue to face water and sewerage challenges - hence having lead to the cholera outbreak which had until 1 February a death toll of 3229 according to the UN. The budget highlights that the water and sewerage reticulation systems are going to be returned back to the local authorities. This is good news to the citizens of Zimbabwe. CSOs have consistently lobbied for the return of the water supply to the local authorities since the taking over by ZINWA catastrophically impacted the deterioration of the sector. Parliament has noted that the decision was a cabinet decision and not a parliament decision.

NANGO is concerned that the amount of resources that have been earmarked for the water and sewer system will not be adequate given the criticality of the situation especially the cholera outbreak. Thus international donor assistance in this area is crucial and the government has to ensure that the international donor community can rebuild the trust necessary for investments in the country. (if you take my suggestion you have to align it with the next sentence) All the major towns have had their populations ballooned, overstretching the carrying capacity of the sewer system hence the overflow of the sewer.

With the changeover to local authorities, there is need for resources to see to it that this takes place smoothly and local authorities are capacitated to undertake this crucial task.

Health Delivery System

The health delivery system is in total collapse with most of the health delivery institutions having scaled down operations while some having closed down all together. Key challenges include lack of equipment, essential consumables, drugs, salaries which do not ensure the livelihood of health sector employees, as well as skills loss due to the brain drain. At the same time medical aid insurance are no longer accepted.

Health institutions are now permitted to charge in foreign currency hence making it practically impossible for those who do not have the necessary foreign currency to access even the basic healthcare. And that is the vast majority of Zimbabweans. This move will help derail the attainment of the Millennium Development Goals (MDGs) especially MDG4 (reduce child mortality), MDG 5 (improve maternal health) and MDG 6 (combat HIV/AIDS, malaria and other diseases)

Education

A notable aspect of the budget is the remuneration of teachers (inclusive of all civil servants) in two currencies: Payment of salaries in local currency, with periodic reviews in line with cost of living developments and payment of a monthly foreign currency allowance, to facilitate access to a basket of goods and services now being charged in convertible foreign currencies. This arrangement is unlikely to incentivise the teachers since the alleged forex component will be handed out in vouchers. But vouchers which are not backed by hard currency are worth nothing – it like printing your own money on Xerox paper.

The amount of US$ 46.1 million stipulated in the budget for teaching, learning and equipment falls far short of the requirements of our educational system – especially since most equipment is non-existent since for a long time no investments in equipment was possible. There is need for the government to increase the budget allocation for the educational system to kick off. Same can be said with regard to un-adequate resources presented in the budget for the Zimbabwe Schools Examination Council to enhance the credibility of the examination system.

The new fee system for higher education – in which students are asked to pay an average of US$1200 will be a mammoth task for their parents or guardians. With the government not yet paying in US and it being the major employer in the country, the new measure will make higher education inaccessible to the majority. This has repercussions to the economy which critically needs the human capital after suffering the brain drain since over a decade. Thus, here is need for the government to review the fees in line with the general remuneration system in the country.

International Cooperation

Cooperating partners are crucial as evidenced in the year 2008. The international community assisted the country to the tune of US$ 50 million (2009 budget statement). This aspect shows that the country cannot continue to live in isolation. The All Inclusive Government hast to take the opportune time of its launch to reengage with the international community to rebuild trust and to seek humanitarian assistance to complement the few resources that will trickle in through the fiscus.

Food security

The National Budget Statement is unfortunately silent on the amount of resources that has been allocated towards alleviating the food crisis that has grippled the country. With the World Food Programme estimating that at least 7 million people require food aid in February and March, the budget, as the tool for distributing the national resources, should have clearly highlighted how much the government is specifically earmarking for the crucial humanitarian activities.

Even though that the dollarisation has had and will have a positive impact on stimulating an improvement of food availability the government has failed to scrutinize on the other side how the majority of people in the country not earning in foreign currency can afford to buy the goods and services. The concept of dollarised shops has only helped to assist the rich who have access to foreign currency but the poor will remain vulnerable even though the goods are in the shops. The dollarisation aspect of the shops and wholesales will work to handicap the attainment of the MDG number 1 aimed at eradicating poverty and hunger.

Defence budget

The Ministry of Defence as the norm over the years also got the bigger share of the budget. 8% of the total budget was allocated to the ministry of defence when the country is enjoying peace and tranquility. There is need to reduce the defence budget so as release funds towards the alleviation of the current humanitarian crisis.

Taxation

The budget highlight shows that the tax free income has been set at US125. Given that this figure is below the poverty datum line-the new tax measures will further compromise the positions of the very few earning the foreign currency giving a living to the majority (the rural households, the unemployed, school children, e.t.c.) who have no access to the foreign currency. This tax measure is likely to exacerbate the humanitarian crisis. There is urgent need to review these tax brackets in order to cushion the majority in the country.

National Budget and Government of National Unity

The national budget did not take cognizance of the possibility of national unity. The vote allocation in the budget did not reflect the structure of the purported ministerial portfolios as contained in the Global Political Agreement. The implication of this is that there will be need for the incoming Finance Minister to reallocate the finances to reflect the status quo. Once reallocation takes place some ministers will gain while others will be reduced leading to the distortions on the current analysis.

Revision and Realism a must

There is need for the government to revisit the assumptions underlying the budget so that realistic goals are set. A positive growth rate and double digit inflation figures remain a milestone to be achieved hence the government should revise these projections. The resort to service charges for education, health and other basic social services in the absence of a strong social welfare system to cushion the vulnerable will exacerbate the suffering of already distressed Zimbabweans. NANGO continues to rally its membership to to support the people of Zimbabwe in mounting initiatives to improve their awareness of the important role that citizens must play in the national budget processes, and in holding authorities accountable for their economic governance of the country.

It is NANGO’s considered position that the Government should give due attention to establishing the appropriate delivery mechanisms to preside over the implementation of the budget. This will compel actions such as the establishment of the Inclusive Government, restoration of international relations and promotion of good governance, anti-corruption, rule of law, respect for human and property rights as well as the creation of democratic conditions.

A Day In The Life Of A Nurse: Island Hospice Service

As I prepare to go out for my usual daily visits planning to pass through the hospital wards and then proceeding to the patient’s homes, the phone rings. A relative of my four patients who all live together in the same house urgently requests me to come and review one of the patients who had deteriorated. I do a quick mental prioritization of where to go first because I have to cover a distance of 30km from the office. I settle on seeing the urgent request and doing a hospital ward visit later. Going out to the car park to pick my car, I am greeted with two flat tyres on the car.

I attend to the flat tyres only to realize that one of the tyres needs more than just inflating with air it needs mending. I rush to the garage for the tyres to be fixed. After a good 30 minutes of patiently waiting the wheels are finally fixed and I proceed to the patients’ home.

On arrival, one of the patients is in severe pain and has not had his last three morphine doses as the carer says the morphine is causing the patient to deteriorate. Further investigations reveal that, the other patient in the same household had died the previous night and this is when the morphine administration was stopped by the carer. The other two patients, who are the in-laws to the deceased are crying and can’t handle it. It is initially difficult to tell whether it was due to grief or to pain.

I explained the processes for the arrangement of ferrying the body to the mortuary. I do pain control management on the patient in pain and some supportive counselling to the other two patients and the affected relative, thereafter I asked to be excused.

I rushed back to the hospital for the ward rounds but in the end I ferry a patient who was due for radiotherapy treatment at one of the only two radiotherapy centres in the country, the hospital ambulance could not escort her due to fuel shortage. On arrival at the radiotherapy unit we are greeted with the news that the machine had just broken down.

I took advantage of this misfortune to drop some morphine tablets for a patient of mine who is under hospital admission at the same hospital. The other patient had to wait in the car.

I finally drove the patient back home without having received the radiotherapy treatment. From the patient’s home l reckon l should visit this sick child who had chemotherapy a few days ago. This is one of my lighter visits as the child is happy, smiling and able to crack a joke and not in any pain.

Just after 1600 hours, I park my car at the office. While retracing the day’s happenings, l glanced at the fuel gauge. It’s slightly below quarter tank, phew! I have to remind myself to start the following day in a queue at the Service/Filling Station. I quickly rash to the office and do the documentation of the day’s events followed by planning for the following day! As I leave the office premises I realize I did not manage to do the hospital ward visits!

I head home feeling exhausted and fully aware that that tomorrow may not necessarily go to what I have planned today! All in a day’s life of an Island Hospice Service nurse.

Island Hospice Service: Harare, Zimbabwe

NANGO Welcomes Belated National Budget Statement

NANGO Welcomes the Belated Announcement of the National Budget Statement, scheduled for Thursday 26 January 2009

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Laments the Undemocratic, Top-Down and Non-Inclusive Budget Formulation Process

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Expresses Hope for a People Centered, Gender Sensitive and Child Friendly National Budget to Address the Humanitarian and Economic crises

The National Association of Non Governmental Organisations (NANGO) - representing Non Governmental Organisations operating in Zimbabwe - welcomes the belated annunciation of the 2009 – 2010 National Budget Statement scheduled for 26 January 2009. However, NANGO remains concerned at the extent to which the budget formulation process has been undemocratic, exclusive, top-down and un-participatory. NANGO urges its membership to support the people of Zimbabwe in mounting initiatives to improve their awareness of their important role in the national budget processes, and in holding authorities accountable for their economic governance of the country.

It is NANGO’s considered view that the National Budget is the government’s most important economic policy instrument, reflective of its social and economic policy priorities. More than any other document, the National Budget statement creates opportunity for the translation of policies, political commitments, and goals into decisions on where funds should be spent, and on who and how these funds should be raised.

The 2009 – 2010 National Budget Statement comes amidst a worsening humanitarian and economic crisis that has rendered the vast majority of Zimbabweans vulnerable and in need of stronger governmental social support mechanisms to meet their survival needs.

A pro-poor, gender sensitive and child friendly National Budget is required to help Zimbabweans contend with the effects of a collapsed health delivery system evidenced by the cholera outbreak, a non operational education system, food insecurity, a sky-rocking hyperinflation, the dollarisation of basic goods and service and unemployment.

In order to effectively address the urgent social priorities for national development and the humanitarian crisis, the National Budget must be geared to provide effective stimulus to Zimbabwe’s ailing economy and depressed revenue base. Likewise the budget must clearly articulate how the government intends to raise the required foreign currency to sustain the economy in light of the increasing dollarisation, wide break-down of the Zimbabwean export market, and a factually worthless Zimbabwean Dollar.

NANGO calls upon all responsible authorities to come up with a National Budget that is in sympathy with the urgent need to adress the worsening humanitarian crisis and the ailing economy. Such a budget should ideally focus on giving short-term relief to the millions of Zimbabweans who are unable to meet their basic needs and in the medium to long-term increase the government’s revenue base by stimulating the economy to become vibrant again. Specifically the budget should address the following:

ü Arrest the cholera endemic - with over 2500 people having died of cholera; more resources need to be put towards this cause – especially in the water, hygienic and sewage sectors. We cannot allow the situation to deteriorate further. Revamping of sewerage and water reticulation system should be done urgently.

ü Educational system - with 2008 having been a wasted year, the same cannot be of 2009. Resources need to be set aside for rehabilitating the educational system, proper and incentivised remuneration of civil servants. An upheaval in the educational system can no longer be tolerated as the future of our children cannot continue to be compromised.

ü Non partisan food distribution - the budget should complement the current relief efforts that are being undertaken by the humanitarian organisations so that all people in need should have access to food and humanitarian requirements.

ü Subsidies to the agricultural sector - so that inputs are readily available to all farmers so that we revitalize the agricultural sector and become self reliant. The issue of producer prices needs to be addressed in the national budget so that productivity can be enhanced in the agricultural sector.

ü Revision of the tax threshold in order to cushion the majority of the workforce from the effects of hyperinflation and dollarisation in the country. The workers ought to be left with a liveable wage in net terms. With high taxes the majority of people are left living below the poverty datum line.

ü Re-capacitating of the industry so as to reduce the unemployment rate in the country and reduce the pressure from the social service delivery system. The measure to be put in place should encourage employment creation across the country and arrest brain drain.

For the budget to be a meaningful tool there is great need for the political parties to end their impasse and establish the much needed and legitimate, people mandated and accountable government.

In light of international isolation of the country the acting Minister of Finance should note that a weak budget system and poor budget choices exacerbate social problems hence increases the vulnerability of the poor. NANGO therefore calls upon the Minister to give priority to the socially inclined sectors so that the dignity of the people of Zimbabwe is restored.

NGOs in Zimbabwe

I decided to set up this blog after years of following the situation in Zimbabwe, and then writing an article about what non-governmental organisations are doing there to help Zimbabweans. This blog intends to give people who work with, in, and through NGOs in Zimbabwe the opportunity to tell their stories, about how they are dealing with the situation there on the ground.

This is not intended as a political platform, but rather as a way of sharing stories about the hard work being done by organisations whose aims are to make life better for the people they serve. There is already so much political commentary online and elsewhere about Zimbabwe, but rarely are real situations involving real people covered, unless they are explicitly political in nature. I understand that politics affects people, and some NGOs doing work in the country cannot help but involve themselves in political issues, but the aim of this content is to record what people are doing or have done to improve the lives of the people of Zimbabwe.

I hope that contributors will do their bit to cover this period of tribulation in Zimbabwe, which I also hope will soon fade into the annals of history. May better days come soon for Zimbabwe's people!