Business Reporter

THE Confederation of Zimbabwe Industries has hailed the 2010 National Budget as a progressive budget that seeks to address issues relating to reconstruction, equitable growth and stabilisation amongst others.

CZI vice president, Mr Joseph Kanyekanye who presented the CZI review of the budget said as an organisation they appreciated the minister’s acknowledgement that the situation in the country was still critical.

"The theme of reconstruction, equitable growth and stabilisation was an appropriate theme that shows that the minister has a clear vision of what the budget set out to achieve," he said.

On the positives in the budget, Mr Kanyekanye said that the crafting of a medium term framework to guide the budget was a welcome development.

He was, however, quick to point out that this would only work as long as the measures outlines in the framework are in line with the goals of the budget.

He said as CZI they were convinced that in terms of the economic growth, the country had reached a plateau and that the Special Drawing Rights funds from the International Monetary Fund will help spur the country to higher levels. The re-affirmation of the continuation of the current multi-currency regime in the economy, he said should help bolster confidence within and outside the country.

"It is good assurance to business that the multi-currency system will remain in the medium-term," he said.

On taxes, he said that while they welcomed the reduction in corporate tax from 30 percent to 25 percent, the reduction in personal tax failed to meet expectations.

"We had expected a further reduction in order to increase disposable incomes in a drive to spur local demand," Mr Kanyekanye said.

He said the reduction of NSSA contributions to three percent as well as the cap of $200 was a welcome development as previous contribution were weighing heavily on the business operating environment.

On bank deposits, he said the figure of over US$1 billion was pleasing and that the deposit and lending ratio of 50 percent was reasonable given the absence of a lender of last resort and given the fact that the majority of deposits were short-term.

"We would not welcome administrative regulations aimed at increasing this level as it could cause a loss of stability in the financial service sector," he said.

Mr Kanyekanye said as CZI they welcomed the extension of the duty free on basic commodities to the end of July as well as the suspension of duty on selected inputs to make basic commodities as these promoted the aspect of social protection and levels the playing field for local producers to become competitive.

He said that they had reservation on the VAT payment date of the 10th which falls short of business needs.

"We need to be able to give 30 days credit so we need the date to be the end of the following month," he said.

He added that they were also disappointed that not sufficient money was allocated to infrastructure development despite infrastructure such as roads, rail, and electricity being key to the economic turnaround process.

Stanbic Bank’s economist, Mr Panashe Chitumba told delegates to a post budget meeting that was jointly organised by Stanbic and PriceWaterhouseCoopers that the minister should be commended for managing to allocate scarce resources to key sectors of the economy.

He said that although the country has stabilised growth levels in the economy, GDP, in terms of jobs was still relatively low and the focus should be on growing these by allocating adequate resources to infrastructure development.

He also said that for economic progress to be achieved going forward this would largely depend on political harmony in the country.

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