By Stanley James


Following the presentation of the 2010 Mid-Term Fiscal Policy Review Statement yesterday, concern is being raised on whether government can balance the act between revenue inflows and spending, on the back of limited funding the economy is currently facing.

Economic experts now say Zimbabwe should look inside the country for economic growth instead of expecting funds from donors.


Revenue inflows have however improved since January this year with collections expected to hit US$1,7 billion by December from earlier projections of  US$1,4 billion, but the major issue under spotlight is on whether the current  limited financial resources are enough to sustain  government operations?

As official figures from the fiscal authorities show that US$ 207 million has been raised from the vote of credit against US$ 810 million, then can the economy continue to rely on pledges which  are not  being fulfilled?

A financial analyst, Mr. Silas Karambwe says government should find new ways of boosting revenue inflows.

“What is now required is that sense of raising additional funds to sustain the economy apart from donors,” said Mr. Karambwe.

Although Finance Minister Mr. Tendai Biti reviewed tax free thresholds to US$ 175 from US$160 in order to boost disposable incomes, a tax expert, Mr. Lovemore Matsika says the arrangement will  improve disposable incomes but pose a challenge to fiscal authorities as this is likely to increase the budget deficit which has been projected to 11 percent of gross domestic product deficit by year end.


“This budget presents all those sorts of impetus to economic stakeholders to stick to their funds in terms of planning,” said Matsika.

While Minister Biti also supported an announcement by the  Head of State and Government and Commander-in-Chief of the Zimbabwe Defence Forces, President Robert Mugabe during the official opening of the 3rd Session of the 7th Parliament of Zimbabwe that the economy is projected to register a 4,5 percent, an economic analyst, Mr. Nyasha Chasakara says Government is on course to achieve the 2010 macro-economic growth targets despite capital constraints.

 “The budget is meaningful but what is needed is for us to put our hands together and work for the benefit of the nation,” Chasakara urged the nation.


Economic observers say government should introduce a tight revenue collection system to ensure that all  revenue from key sectors of the economy is accounted for in the books of treasury so as to broaden the income generation base and fund critical sectors such as health, education and agriculture.


The questions that are in many people’s minds border around the commitment of fiscal authorities towards increasing revenue inflows.

Other questions are: To what extent can a tight spending system increase economic growth?


How can the private sector assist government on income generation?


Are there any possibilities that the revenue and expenditure systems can be leveled?


And what will be the effects of a budget deficit on an economy that is showing signs of recovery?


Indeed a lot still needs to be done by the  authorities in restoring economic confidence.