Note that the main cuts are in Education, Security, Governance and Commissions, whereas other areas have been increased. Divided by specialist areas, 25% is spent on Economic Growth; 40% is spent on Social Welfare; 20% is spent on Security; and 16.25% on Governance, Commissions, Public Relations and Small Ministries. The next section provides explanations of how this list of priorities was devised, assuming that the Government will not be in a position to increase its income in the near future.
Brief Explanations Regarding Proposed Priorities
Widespread discussion will help to arrive at agreed priorities. Different institutions may find it useful to utilize this framework as a basis for discussions. There may be differences in how much emphasis should be placed on each priority, depending on the interests of different groups. However it is important and appropriate that such a national dialogue should take place at every level, rather than that such a large proportion of the National Income such as the Budget is passed by Parliament every year without in-depth analysis of how effectively it is being used.
At present there is a lot of emphasis on attracting Foreign Direct Investment (FDI). FDI is of course important, but it is also crucial to note that both Japan and China first began by utilizing domestic savings to promote agriculture and food security. Japan, through close collaboration between Government and the Private Sector, encouraged the growth of agricultural surplus and domestic funding. The first ten years of China’s opening up of its economy after 1978 stressed and improved agricultural development.
- Economic Growth
Government and Private Sector share the responsibility for economic growth. When the two don’t work in tandem, it is unlikely that much economic growth will take place. The National Budget comprises about a third of the total GDP, and it can play an important role in spurring the development of economic institutions including farms and factories. Generally a minimum of 20% of the Budget is recommended to stimulate economic growth. However countries like China have devoted more than 30% during their growth period from a developing to a developed economy. Larger investment can speed up economic progress if effectively used. It may be difficult to increase immediately from 20.43% of the Budget, so it is recommended that it rise to at least 25% as soon as possible. It is essential that this be increased substantially every year. It would be appropriate to aim at reaching 30% of the Budget being allocated to Economic Growth. As Government remains the leader of the whole economy, the Private Sector will be heavily influenced by how much the Government allocates to Economic Growth, and how this will be spent. The Government Budget will stimulate a similar rise in domestic investment into the Economy. A rise to US$2 billion in domestic savings could also stimulate an increase of a similar amount in donor funds and FDI, as domestic savings is so critical.
Agriculture has an enormous potential for immediate growth. It could double its contribution to the GDP within a few years. Agriculture must necessarily be the key focus of economic development for many decades to come, especially so for the next five years. Economist Eddie Cross estimates that the output per farmer was about US$4000 a year before 1997, whereas in 2017 it was only US$1030 per farmer. According to this estimate, agricultural production could quadruple if effective policies and support systems were created and implemented. If he is correct, it would mean that the 12.2% that Agriculture contributed to the GDP in 2016 has an almost immediate capacity to increase the GDP substantially. The quadrupling of agricultural productivity alone could increase the GDP by 14% from US$14 600 million in 2016 to about US$20 000 billion within a few years, no mean achievement in such a short period of time. Yet this is within the realm of practical possibility.
Policies which can contribute to the growth of Agriculture include subsidization and support of important agricultural industries such as fertilizer, seeds and chemicals such as Command Agriculture; supporting the establishment and strengthening of industries which provide and develop tractors and equipment for agriculture; Research and Development; further in-service training of agricultural extension workers; suitable in-service training for all levels of farmers; provision of suitable transport and funds to enable extension officers to do their jobs; assisting small scale farmers to have some access to mechanization; linking growers to their markets; etc. These policies should be targeted at banks; institutions such as associations of professionals which serve agriculture such as irrigation engineers; farmers’ unions; etc. One of Zimbabwe’s perpetual problems is that we have three years of drought out of every five years. Joint support for irrigation schemes including the State, local government, farmers’ associations and groups of farmers could bring about solutions to this perennial challenge.
The stimulation of industries for tractors and equipment can lead to the development of export markets throughout SADC, as the challenges facing Zimbabwean small scale farmers are also faced by their neighbours.
The manufacturing industry, particularly in terms of agricultural and construction machinery and materials, also offers huge opportunities for both old and new industrialization, and could find new markets in the Region. There is urgent need to re-orient manufacturing to cater for the needs of the majority, who are mainly farmers, and who need to mechanize their industry. The strengthening of engineering companies so that they can provide local production suitable to farmers’ needs is very important.
Education is of critical importance for the mental, emotional and economic development of the nation. UNESCO has recommended that 20% of State Budget should be allocated to Education. Investment was about 23% of total Budget in 1980s, 1990s, 2009 – 2017, but this broke down under Hyper-inflation and Sanctions (2002 – 2009). The breakdown resulted in marked deterioration of education quality as measured by Grade7 and “O” levels exams. However it is necessary to increase the Budget gradually rather than too quickly. It is recommended that investment into Education is reduced to 23% of the Budget, the level of the 1980s and 1990s, modest but adequate.
Amalgamating the two Ministries can bring about greater coordination and efficiency and a saving of an estimated US$50 million which can be spent on improving in-service training, infrastructure and hardware which are poor in both Ministries, mainly because of under-investment in new technologies, in-service training, and hardware. Surveys of industry satisfaction about the suitability and standard of tertiary education and training to industrial needs show that there is a poor match.
Investment into Security Services varies globally. Obviously Security is of utmost importance for development. However efficiencies can be made by improving the training of staff, and slimming down the number. Larger numbers do not necessarily increase efficiency, especially if they are under-qualified and under-trained as well as under-paid. More should be spent on hardware and efficient management to enable them to be more effective.
The World Health Organization (WHO) recommends that between 10 – 15% of Budget should be devoted to Health. Zimbabwe invested between 7 – 8% of the Budget on Health in the past, but it is essential to increase it gradually as the Budget is quite inadequate, with little or no medication in clinics and hospitals. Health is heavily dependent on donor inputs which are both unreliable and tilted towards donor preferences. Medicines and treatment should be subsidized, but should be affordable except for Under-Fives and Pregnant Women who should be given free treatment.
A slimmed down President’s Office, for example reducing the US$20 million spent on travelling and slimming down the bureaucracy for State Houses could bring a saving of more than US$73 million. A reduction of Governance to 9% of the Total Budget would bring the allocation to US$452 million.
This is very underfunded. It should be increased to 4%. A popular and low cost intervention would be to provide US$20 a month for those over the age of 65. The number of the population over the age of 65 is very small, so the cost would be minimal, but would be highly visible and popular. 70% of the population are poor, and targeting this small group would have a large impact on poverty, as these grandparents have been left with onerous child care responsibilities as a result of HIV AIDs deaths and exit of large numbers of parents into diaspora. This has already been successfully implemented in selected districts over the past 10 years.
Creating friendships and trade relations with other countries and improving information, both through traditional and computer media, is important for business. The low investment in this area hampers the growth of tourism for example, compared to rivals which are able to advertise lavishly internationally. Increasing this component may be very advantageous to Zimbabwe if it is done judiciously by spending on programmes rather than on additional bureaucracy.
Commissions have been an area of growth. In 2016 there were only 2 Commissions (the Judicial Service Commission and the Public Service Commission). This has now increased to 7. The amount to be allocated to commissions could be decreased to a more modest 3%.
- Small Ministries
These small Ministries need to be reorganized so that the bureaucracy is lowered whilst funding of programmes is increased. At present the bureaucracy is large but the achievements are limited.
The proposed re-organization provides a vision of how Government expenditure can be skewed towards greater productivity, whilst at the same time protecting basic services.
 Eddie Cross,“Agriculture Key to Zimbabwe Economy”, The Independent, 27 May 2016.
 Source: http://www.cia.gov.library/publications/the-world-factbook/geos/zi.html
 Figure from IMF.
 See Confederation of Zimbabwe Industries, 2015 CZI Manufacturing Sector Survey Report.