Unpacking The 2022 National Budget: An Informal Economy Perspective

The Minister of Finance and Economic Development Professor Mthuli Ncube presented the 2022 national budget on the 25th of November 2021. The budget, which was fashioned as being pro poor is nothing close to that but rather shows the government’s commitment to neoliberal policies. The budget clearly indicates increases in taxation that will have a negative impact on the poor such as the proposed increase in withholding tax, from 10% to 30%, the introduction of an additional 2% on fuel and the USD 50 tax on imported handsets. The latter goes against the spirit of minimizing the digital divide in this era of COVID-19 where the nation should be seen trying to enhance digital literacy amongst the disadvantaged classes of society, particularly with the introduction of online classes for school children and virtual marketplaces for the informal traders.

                          

Social protection is a key tenet of any society and the expectation was that there would be meaningful scientific allocation towards this in line with SDG 8 that stipulates the provision of decent work and social protection provision as part of formalization of the informal economy. At ZWL 10 billion, the proposed allocation for the Ministry of Public Service, Labor and Social Welfare falls way short of the many competing interests for the Ministry in so far as social protection is concerned. VISET is of the view that as with the Abuja Declaration on health, there is need for a specific allocation of GDP that must be allocated towards social protection, or as in other countries, we must allocate a percentage of revenues from a key economic activity such as mining, which will then go towards a national fund. The COVID-19 pandemic has shown that the nation’s disaster preparedness falls woefully short of expectation in so far as providing cover to the many economically active citizenry plying their trade in the informal sector who were left exposed by the COVID-19 pandemic.


Whilst we acknowledge the increase in the allocation to the Ministry of Health and Child Welfare, we remain concerned with how the wage bill will be funded, as health personnel are constantly up in arms with the fact that their salaries are eroded by inflation on a daily basis.


Young people were estimated to be 67% of the population in 2018 and greater consideration needs to be given to their needs, particularly given the fact that many of them are graduating from colleges and universities to join the jobless market or try to eke a living in the already populated informal sector. At ZWL 7.8 billion, the proposed allocation cannot be anywhere near adequate given that a significant part of this is being channeled to the upgrade and rehabilitation of sports facilities.


The Ministry of Women Affairs, Community, Small and Medium Enterprise Development was allocated ZWL 4. 7 billion for funding to institutions such as Women’s Development Fund and the Zimbabwe Women’s Microfinance Bank. VISET is concerned that in many of its interactions with its membership, many people have expressed ignorance of such initiatives or that they are administered through partisan channels.



In light of the foregoing, it is VISET’s contention that the budget presented to the nation by Minister Mthuli Ncube is not reflective of the peoples lived realities, it is instead a continued assault on their existence as it prioritizes incentives to corporate entities whilst increasing taxation on the poor. We cannot be made to believe that for instance, the proposed USD 50 tax on handsets could have emanated from the nationwide consultations, hence it beggars the question as to why the Ministry and Parliament went to great expense in conducting pre budget consultations if all was done as a means of ticking the boxes on an already concluded exercise.

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