VISET Statement on the 2023 Budget

Vendors Initiative for Social and Economic Transformation (VISET) takes note of the budget presentation by Minister of Finance, Economic Development and Investment Promotion Professor Mthuli Ncube, and the subsequent debate and passing of the 2024 National Budget on 15 December 2023.

It is important to state from the onset that the budget in our view as an informal economy organization, is an assault on the existence of traders and indeed the common man. A budget that seeks to raise charges on soft drinks, passports and tollgates, all of which are critical enablers in the informal economy ecosystem, cannot be viewed as progressive.

The least said about the allotted amounts to ministries the better, considering that these allocations are in ZWL, yet it has already lost significant value against major currencies, even before we get to year end! Through bureaucracy, many ministries, particularly Health and Child Care in the past have complained of late disbursement of funds, a situation which has led to suppliers of medical drugs and equipment shunning procurement tenders. It has already been predicted that the country will experience food insecurity, with as many as 2.7 million requiring food aid, according to Minister of Labour and Social Welfare July Moyo, yet this is not reflected in the budget statement.

Major urban cities are currently facing crises of water supply owing to rapid population growth, polluted water bodies, and decaying infrastructure, that has led to cholera outbreaks, yet no meaningful amounts have been allocated towards completion of Gwayi-Shangani, Muda and Kunzvi dams, to name but a few.

The formalization of the informal sector has been on the cards for over 2 years, yet we have not seen corresponding commitment of government through the allocation of resources towards ensuring operationalization. If anything, we saw Minister Ncube proposing measures that will bar traders not registered for tax, being unable to buy goods directly from manufacturers and wholesalers. All this will achieve, is enhancing underground economic activity and the promotion of imported goods to the detriment of local industry! It is important to note that informal traders have been playing a crucial role, in particular during and after COVID-19 in bringing products closer to the people, with neighborhood tuckshop operators extending credit, providing relief to their customers. Government would be well advised to incentivise informal economy players through provision of working capital and social security schemes rather than the use of punitive legislation.

Minister Ncube proposed a 0.02 percent tax on soft drinks which will impact directly on the numerous traders, many of them with disabilities, countrywide who are earning a living from the sale of the soft drinks, as prices will increase, thereby threatening viability.

Passport fees had initially been projected to rise from US$120 to US$200, which was eventually reduced to US150. We feel this is still beyond the reach of the ordinary person and that commercialization of national documents flies in the face of constitutional provisions that guarantee issuance of such to citizens of Zimbabwe at reasonable cost. Cross border traders have long raised issue with the cost of $120 and we will continue lobbying efforts for its reduction. Of similar concern is the increase of 50 percent on tollgates, which will hit informal traders, many of whom engage in intercity trade, and farmers who transport their produce.

In summation, we at VISET believe that the budget does not in any way protect the poor and vulnerable, but instead seeks to increase their economic vulnerability. We urge Minister Ncube to focus on sectors such as mining, it cannot be that gold miners pay 5 percent royalty tax, with many evading taxation through smuggling across porous borders. It is also our considered view that corruption in the public sector is the greatest form of taxation, and that if this is tackled effectively, Zimbabwe will take it’s rightful place economically!