New Cabinet faces economy challenge

With Cabinet composition decided, the issue of whether it is bloated or not should now be water under the bridge.

What is important is how newly-appointed ministers go about tackling the huge pile of economic issues facing the country, in addition to the social and political ones.

Poverty alleviation is one of the major issues that must be addressed as a matter of priority. Although it has been a top agenda item for previous governments, it has now taken an even more urgent nature given the post-election turmoil that has seen the displacement and the disruption of lives of many economically active people.

The turmoil has contributed to an upsurge in the cost of living, especially through rising food prices, and placed many households in the poverty bracket where they have to rely on food handouts.

Hence, beyond the swearing in ceremonies and celebrations, the Government has to get down to the serious business of ensuring that the economy starts growing again to provide the much-needed jobs and incomes that would go a long way in addressing the chronic poverty in the country.

For the Minister for Finance, especially, the challenge is on how to balance the Government finances in such a way as to provide funds for the competing needs — both in the short term emergency situations as well as medium and long term development programmes. These include food provision and resettlement of the internally displaced as well as start the urgent rehabilitation of infrastructure.

Further, the Minister has also to grapple with the task of financing the new expanded Cabinet in terms of salaries, allowances, office space, vehicles and other running expenses for the additional ministries. This situation is compounded by the fact that the economic growth has considerably slowed down since the beginning of the year. Indeed, in the past one month or so, the Finance minister has been forced to revise down his projected growth rate twice, setting off distress signals.

We need a serious rethink among the Treasury technocrats, given the soaring inflation, unbudgeted post-election spending, slowdown in gross domestic growth and the sharp drop in food production.

They must seriously scrutinise Government’s financial health and spending priorities, with the possibility of tabling a Supplementary Budget in Parliament before the annual budget in June.

The situation also calls for a rethink in terms of development priorities. It may well be prudent to focus on key areas that have high impact in spurring growth.