Zimbabwe’s 2010 budget was well received by analysts and business people, but the fragility of the unity government remains a threat to the finance minister’s plans.
Tendai Biti, who inherited a near-basket-case economy when he assumed the role of finance minister in March, was broadly optimistic about Zimbabwe’s prospects, but left little doubt of his concern that bickering within the government was holding the economy back.
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Mining taxation was increased, with higher levies and tighter limits for mining exploration concessions along with an increase in the precious metals royalty for gold and platinum to 3.5 per cent from 3 per cent.
Although some in the mining sector are unhappy at the manner in which their industry was singled out for special attention, Mr Biti pointed out that with the gold price at record levels and platinum prices sharply higher in 2009, the miners had few grounds for complaint.
Economists praised the finance minister’s efforts to streamline and flatten the tax-structure. Nyasa Chasakara, investment analyst, welcomed the increased taxation of the mines saying other regional economies were reaping the rewards of such investments and Zimbabwe should not be an exception.
Industrialist Antony Mandiwanza said he thought the budget would have a “beneficial impact” and particularly welcomed the provision of $53m for rehabilitation of the state-owned electricity company, Zesa, and the extension of import duty relief on imported foods which would keep supermarket shelves stocked.
Although the country’s economic prospects have improved, there is no denying the serious challenges facing the fractious government.
* Financial Times
