VISET Pre-Budget Statement

Vendors Initiative for Social and Economic Transformation (VISET) takes notice of the national budget presentation to be done by Minister of Finance and Economic Development Professor Mthuli Ncube on November 24 2022.

The budget presentation comes against the backdrop of severe liquidity challenges owing to monetary policies implemented by the central bank and the ministry, which has had adverse effects on consumer spending. The continued use of the local currency and the US$ has also impacted negatively on informal traders and their businesses, as wholesalers demand foreign currency when restocking, yet the bulk of sales in the informal economy is in the local currency.

As an organisation, we were part of public consultations that were carried out by Parliament and it is our hope that our member and public contributions will be captured by Minister Ncube.

For the record, we state below some of the submissions that were made in the hearings, along with our expectations.

Infrastructure Development
The 2022 budget saw government allocating funds for market development for the first time ever. Whilst this is commendable, the allocation fell woefully short of national requirements as every urban centre is grappling with the challenge of operating space.

Social Security
The Covid-19 pandemic and associated lockdown measures brought home the reality of the need to have a proper social security scheme for the informal economy to cater for such instances. Our expectation is that there be a fully constituted scheme in much the same way as the National Social Security Scheme (NSSA) covers the formal sector, in order to avoid fraud and misappropriation as happened in the cash relief funds that were earmarked for the informal sector in 2020 as was unveiled by the Auditor General to Parliament.

The Abuja Declaration of public financing of the health sector stipulates that countries need to allocate at least 15 percent of the national budget to the health sector. Whilst Zimbabwe has made progress in this regard, more still needs to be done. Reports abound of public hospitals not being able to draw down allocations, with suppliers going unpaid, with most of the allocation going to head office salaries and benefits. Recently, the Deputy Minister of Health and Child Welfare acknowledged the dire situation in public hospitals with lack of medicines and sundry supplies being a challenge to the extent that some institutions were suspending surgical operations. Health personnel are also currently leaving the country in droves owing to low remuneration and poor working conditions. It is also our expectation that the Minister will dedicate funds to the setting up of specialised drug rehabilitation centres throughout the country’s urban areas, where drug use amongst youths is a ticking time bomb.

Women and Gender
The bulk of our membership is predominantly made up of women who constantly face challenges in the pursuit of earning a livelihood. We believe the Minister should allocate funds towards addressing unpaid care and domestic work that women are saddled with from early years, where some are forced to abandon schooling to cater to family members. Recently, we have seen an increase in reports of young girls aged as low as 9 years, being abused and
impregnated. Whilst we acknowledge that this requires a multifaceted cross sectional approach in order to address, we believe that significant funding needs to be allocated to this sector in order to raise awareness and to empower the girl child.
The provision of free sanitary wear in public institutions is in need of urgent address and we hope the Minister will take advantage of this occasion to attend to it.

Taxation and Economic Policies
Much as we have highlighted above the challenges we seek to see addressed, a significant portion of the blame lies in the levels of taxation that individuals are subjected to. At 41.2 percent income tax, Zimbabweans are amongst the most taxed and this has a significant impact on spending power and habits, thus adversely impacting on informal economy players and the viability of their business enterprises.

In equal measure, the overall economic policies being pursued are in need of urgent redress. The government continues to pursue economic policies that are inimical to the growth and development of the informal sector as the focus remains one of incentivising the formal sector companies with benefits such as tax breaks whilst the informal sector is saddled with tax burdens such as presumptive tax that was introduced in the 2022 budget.

Whilst the government has begun the process of formalisation, of which we are involved in, we believe more needs to be done to incentivise the informal sector through facilities such as availing of loans at concessionary rates, capacity building programmes, recognition of trade skills, provision of decent work structures and adequate social protection schemes.

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