Home » Business » Going Round the Fiscal Bend – Children Cannot Wait! [column]

Fiscal policy is the budgetary stance of government. It is concerned with not only how much revenue is raised, but how it is raised and on what it is spent. These issues are the subject of much debate. Should we spend more on education, or more on health? If we choose to spend more on both, how should we raise the necessary revenue? Should we increase taxes, if so, which taxes, or do we look at alternative funding mechanisms, or increase debt?

It is now common knowledge that Zimbabwe faces a serious fiscal challenge that, if left unchecked, could trigger a chain of events leading to social and economic catastrophe in the not-too-distant future. You need not be an economist nor a rocket scientist to know that with over 80 percent of the National Budget going towards employment costs, and over 90 percent going towards total recurrent expenditure, that as a country, we have a problem.

This problem, compounded by, among others, an external debt overhang of about US$8 billion, a trade deficit of about US$3 billion, a Central Bank unable to sufficiently fulfil its role as a ‘lender of last resort, and banker to the Government, needs to be addressed today, not tomorrow!

Because it is today that we have children hoping to go to school, it is today that we have children yearning for quality education, a chance in life, it is today that we have children crying out for our support, our compassion, our love, and our action.

How does this translate into fiscal policy, and why should we all be concerned about the state of fiscal space (or lack of it) in Zimbabwe?

Take one example investment in education. In his 2015 National Budget, Honourable Minister of Finance and Economic Planning Patrick Chinamasa announced an allocation of just over US$890 million for the Ministry of Primary and Secondary Education, representing just over 22 percent of total Government spending.

It is an impressive allocation, but less impressive is that US$873 million will be consumed by employment costs alone, that is, 98 percent of the total allocation to education! Granted, the payment of teacher salaries and the salaries of education administrators across the different levels of Government is just as important as payments for textbooks, infrastructure and other inputs into education.

No doubt about that!

But if the Government is only able to meet employment costs in the education sector (where 118 000 employees were in post as at September 2014), and very meagre allocations for school infrastructure and maintenance, education equipment and supplies, then a significant burden of education financing is being carried by parents (through school fees) and donors (through pooled funds)!

This is just one example in education, but in reality, the fiscal challenge is pervasive across all government departments. The question that then begs an answer is, how sustainable is this kind of situation in the education sector (and in other sectors for that matter)? And if we agree this is not sustainable, what is to be done?

It is about addressing fiscal space, and in doing that, it is about addressing the underlying challenges in the economy.

It is, indeed, about asking five questions: Firstly, how do we address the ‘legacy’ issues? Secondly, how do we use the little we do have better? Thirdly, how do we expand the fiscal pie? Fourth, what do we do outside the fiscal confines to solve the fiscal issues, and fifth, do we have the political will, and political action to make tough choices?

There is no doubt that bold decisions have to be made to protect and build upon existing investment in children.

It is in our forward-looking interests that the future is not seen as some place we are going, rather, it should be seen as some place we are making! And we need to start making it today!

In his statement at the recent High-Level Fiscal Space dialogue, UNICEF Country Representative, Mr Reza Hossaini quoted a beautiful poem by the late Nobel laureate Gabrila Mistral . . .

“We are guilty of many errors and many faults, but our worst crime is abandoning the children, neglecting the fountain of life. Many of the things we need can wait. The child cannot. Right now is the time his bones are being formed, his blood is being made, and his senses are being developed. To him we cannot answer ‘Tomorrow,’ his name is Today.”

As politicians and policy-makers chart the way forward for this country, it would be good if they reflected a bit about the child named ‘Today’! Indeed, we must be patient but nevertheless expectant and, above all, persistent!

Samson Muradzikwa is the Chief of Social Policy at UNICEF Zimbabwe.

Source : The Herald

Archives