2022 Fiscal Policy: Growth forecast at 5.5%, health, education & agric sectors get lions share

By ZBC Reporter
FINANCE and Economic Development Minister, Professor Mthuli Ncube this Thursday unveiled a 927, 3 billion Zimbabwe dollar national budget in Harare.
Professor Mthuli Ncube presented a people oriented 2022 National budget with a strong bias towards meeting health and educational needs of Zimbabwe’s population as well as steering the country towards vision 2030 and blending the National Development Strategy (NDS1) through agricultural capitalisation, mining and infrastructrure development.
The Ministry of Health and Child Care is to be allocated $117.7 billion, which represents 14.9 percent of the national budget as the government strives to meet the Abuja Declaration target of allocating 15 percent of the national budget to the health services sector.
“Mr Speaker Sir, despite the current efforts towards revitalisation of our health sector, it is apparent that gaps still exist in the health delivery system attributed to shortage of medicines, shortage of critical infrastructure and equipment, roll out of the COVID-19 vaccination programme etc. Therefore, priority in 2022 will be on rehabilitation, upgrading and construction of healthcare infrastructure, including provision of medical equipment, ambulances and operational vehicles. Further, Government will increase fund for medical consumables, hiring of additional medical personnel and reviewing salaries and wages. Consequently, the 2022 National Budget has allocated, ZWL$117.7 billion to the Ministry of Health and Child Care which represents 14.9% of the Budget,” said the Finance Minister.

The minister also proposed to widen the tax free threshold on personal income from $10 000 to $25 000 in order to provide relief to taxpayers and also boost aggregate demand for goods and services. The bonus tax free threshold has also been proposed to be raised from $25 000 to $100 000.
“I propose to adjust the tax-free threshold from ZWL 10 000 to ZWL 25 000 and also adjust the tax bands to end at ZWL 500 000, above which a marginal tax rate of 40% will apply, with effect from 1 January 2022. I, further, propose to review the tax-free threshold on income accruing in foreign currency from US$ 70 to US$ 100 with effect from 1 January 2022. Other foreign currency tax bands remain unchanged.
“I also propose to review the local currency tax-free bonus threshold from ZWL 25 000 to ZWL 100 000 and the foreign currency tax-free bonus threshold from US$ 320 to US$ 700, with effect from 1 November 2021,” said the Finance Minister.
Highlights of the 2022 national budget also included a 2022 economic growth projection of 5,5 percent, revenues of $850 billion dollars, spending at 927,3 billion dollars and duty free importation of capital equipment subject to certain conditions.
Other notable highlights include a 7,8 GDP forecast for this year, $340 billion dollars set for civil service wages next year and excise duty for cigarettes being reviewed to 25 percent. Government will also assume the RBZ legacy debt while duty has been suspended for milk powder and motor vehicle imports by the tourism industry.
The Ministry of Primary and Secondary Education was allotted $11.6 billion in order to be able to meet the demand for education services which have been growing over the years but has not been matched with infrastructure development and the necessary human capital.
“To implement the ministry’s priority projects, an amount of ZWL$11.6 billion is being allocated to the Ministry of Primary and Secondary Education under the 2022 National Budget,” said Professor Ncube.
To support interventions under institutions of higher learning, an amount of ZWL$5.7 billion is being allocated to the Ministry of Higher and Tertiary Education, Science and Technology Development.

Professor Ncube enunciated that the thrust in the agricultural sector is to surpass the 2021 production levels through implementation of the key tenets of the Agriculture Recovery Plan and consequently, an allocation of ZWL$124 billion is proposed to go to the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement under the 2022 Budget. He said this will be targeted towards grain production; horticulture; business advisory and extension services; agriculture research and colleges; animal disease prevention & control; agricultural engineering and mechanisation; water and sanitation; irrigation development and rural development.
“Based on the current agriculture financing model, Government will finance the Productive Social Protection Scheme for crop and livestock (support towards vulnerable households) while banks will fund the private sector, through the National Enhanced Agriculture Productivity Scheme (NEAPS), with Government providing guarantees where necessary,” noted the Finance Minister in his fiscal policy presentation.

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