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Contents Table EMBARGOED TILL END OF DELIVERY ZIMBABWE The 2011 National Budget Statement Shared Economy, Shared Development, Shared Transformation “Creating the Fair Economy” Presented to the Parliament of Zimbabwe on 25 November 2010 By Hon. T. Biti, M.P., Minister of Finance 1 Contents I. MOTION........................................................................................................................... 9 II. INTRODUCTION ............................................................................................................ 9 III. GLOBAL ECONOMIC DEVELOPMENTS & OUTLOOK ......................................... 15 OUTPUT ............................................................................................................................... 15 GLOBAL INFLATION ........................................................................................................... 16 INTERNATIONAL COMMODITY PRICES........................................................................... 17 OUTLOOK ............................................................................................................................ 18 IV. RECENT ECONOMIC DEVELOPMENTS .................................................................. 20 INFLATION .......................................................................................................................... 20 REAL SECTOR ..................................................................................................................... 21 Agriculture ...................................................................................................................... 23 Support for Agriculture.............................................................................................. 23 Grain Production ............................................................................................................ 24 Maize ........................................................................................................................... 24 Strategic Grain Reserves ............................................................................................ 25 Wheat .......................................................................................................................... 25 Tobacco ........................................................................................................................... 26 Cotton .............................................................................................................................. 27 Sugar ................................................................................................................................ 27 Dairy ................................................................................................................................ 28 Irrigation Development ................................................................................................. 29 Manufacturing Sector ..................................................................................................... 29 Mining .............................................................................................................................. 31 Gold .............................................................................................................................. 32 Platinum ...................................................................................................................... 33 Chrome ........................................................................................................................ 34 Nickel ........................................................................................................................... 35 Diamonds .................................................................................................................... 36 Diamond Revenues..................................................................................................... 37 Asbestos ...................................................................................................................... 39 Coal .............................................................................................................................. 40 Tourism ........................................................................................................................... 40 Indicators for SADC Member Countries ....................................................................... 42 Financial Sector .............................................................................................................. 43 National Payment System .......................................................................................... 46 Cheque Transactions .................................................................................................. 47 Card Transactions ...................................................................................................... 47 Mobile and Internet Transactions ............................................................................. 48 Lines of Credit ............................................................................................................. 48 Zimbabwe Economic Trade Revival Facility (ZETREF) .......................................... 49 Money Market Instruments ....................................................................................... 50 Lender of Last Resort Function of the Reserve Bank .............................................. 50 Zimbabwe Stock Exchange ........................................................................................ 51 External Sector ............................................................................................................... 53 Mineral Exports .......................................................................................................... 54 Agricultural Exports ................................................................................................... 56 2 Manufactured Exports ............................................................................................... 56 Imports ........................................................................................................................ 56 Current Account ......................................................................................................... 59 Capital Account ........................................................................................................... 60 External Debt Developments ......................................................................................... 60 External Arrears ......................................................................................................... 61 Commercial Debt ........................................................................................................ 63 V. FISCAL DEVELOPMENTS .......................................................................................... 63 Cooperating Partners Support ...................................................................................... 65 REVENUE PERFORMANCE ................................................................................................ 66 Value Added Tax (VAT) .................................................................................................. 68 Pay As You Earn (PAYE) ................................................................................................ 68 Customs Duty .................................................................................................................. 69 Corporate Tax ................................................................................................................. 69 Excise Duty ...................................................................................................................... 69 Other Taxes ..................................................................................................................... 70 Non-Tax Revenue ........................................................................................................... 70 RECURRENT EXPENDITURE DEVELOPMENTS ............................................................... 71 Employment Costs.......................................................................................................... 71 Pension ............................................................................................................................ 72 Medical Aid ..................................................................................................................... 73 Operations and Maintenance ........................................................................................ 73 Arrears to Service Providers ..................................................................................... 74 Foreign Travel ............................................................................................................ 75 Foreign Missions ........................................................................................................ 76 Social Services Delivery ................................................................................................. 76 Education .................................................................................................................... 76 Health .......................................................................................................................... 77 Social Protection ............................................................................................................
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