THE economy is now in free-fall. This much was confirmed by Finance Minister Patrick Chinamasa when he presented his mid-term fiscal policy statement a fortnight ago. Chinamasa’s budget did not take into account the difficulties the country’s hard-pressed population is facing — there was no tax relief for the struggling working population or reprieve for the grappling-to-survive industrial sector.
Our concern is that even when the situation for the population is getting increasingly desperate economically, government is behaving as though it should be the only institution left standing. Instead of introducing relief measures for the restive population and its industries, government is turning the screws, and putting in place measures that will make it more difficult for people to keep their heads above water.
Recently, government doubled road toll fees, despite public outcry against the increases. The reason for the upward adjustment was that current fees were too little to repair the country’s dilapidated road infrastructure. The Financial Gazette reported recently that money from toll fees had often been diverted to pay civil servants salaries. It turns out the argument that the fees had been doubled to ensure there was enough resources to repair the country’s major roads was deceptive.
Government recently announced that it would introduce more tollgates on the country’s major roads. The idea, apparently, is to ensure that government collects as much revenue as possible from the long-suffering population. Again, we have been told, this is being done to ensure sufficient revenue is generated for road infrastructure development.
The burden to motorists and the travelling public, brought about by the recent tollgate fee increase, is enormous. If we add the recent tollgate fees increase to the increase in tax for fuel (petrol prices, for example, jumped from around US$01,49 per litre to US$1,53 per litre), the net effect is likely to be a market-wide hike in prices due to the increasing cost of logistics, and production.
It was interesting to get the spin from our peers in the State-controlled press that the fuel tax was unlikely to result in price hikes. This was prompted by an announcement by Delta Beverages that it had reviewed downwards the prices for beer across its range of brands. The uncomfortable truth is that this does not reflect buoyancy within the economy; it is a sad reality that disposable incomes are suffering unprecedented erosion, which has resulted in a slump in beer demand.
By reducing the price of beer, Delta is trying to increase demand for its products, and this is a reasonable gesture that underlines its desire to push volumes and therefore keep its machinery busy and workers on the job. We hope to see the same kind of innovation from government that will give relief to the people.