Power Outage Disrupts Zimbabwe's Budget Speech as Economic Struggles Persist

As Zimbabwe’s finance minister, Mthuli Ncube, wrapped up his presentation of the 2025 fiscal budget on Thursday, the parliamentary building in Mount Hampden plunged into darkness due to a power cut. Opposition legislators seized the moment, chanting: “State of affairs! State of affairs!”

The incident highlighted the reality of Zimbabwe’s severe energy crisis, with power cuts often lasting up to 20 hours or more. Earlier in his speech, Ncube addressed the issue, pointing to “significant load shedding that continues to weigh down on growth potential and competitiveness of the economy.” The country’s critical mineral income, which forms the backbone of its economy, is expected to drop by as much as 10% this year, to around R100 billion. The decline is primarily attributed to persistent power outages caused by low water levels in the Kariba Dam and frequent breakdowns at the Hwange coal-fired power station.

Ncube reported that the country’s economic growth slowed to 2% this year, citing the drought and its impact on food production. However, he expressed optimism for the future, stating, “In 2025, we expect to see 6% growth, based on anticipated better rains, stable inflation, and tight fiscal management.”

The government’s financial woes were further underscored by complaints from teachers, who revealed they had yet to receive their annual bonuses. These payments, promised in the local Zimbabwe Gold currency, were delayed, prompting the Zimbabwe Teachers Association to accuse the government of a “contractual breach.” In a statement, the association said, “The absence of this payment has left many teachers unable to meet their financial obligations, particularly at a time when economic pressures are heightened, and end-of-year expenses are critical.”

Salaries for government workers are set to consume 56.4% of the government’s earnings, leading to plans to freeze hiring across most sectors, except education and health. To boost revenue, the government announced new measures, including requiring small businesses to register for corporate and income tax. Businesses that fail to use formal, traceable methods such as point-of-sale machines could face fines reaching hundreds of thousands of rand.

Additionally, Ncube introduced a 0.5% tax on fast food sales, explaining that the move is intended to “promote responsible consumption,” given the rise in non-communicable diseases linked to such foods. Zimbabwe’s betting industry, which grew by 8.5% last year, will also be targeted with a new 10% withholding tax on gross winnings starting January 1, 2024.

Zimbabweans living abroad, particularly those in South Africa, continue to play a vital role in supporting the country’s economy. Between January and September this year, remittances from the diaspora totaled an estimated R34.2 billion, with projections suggesting this could rise to R45 billion by year-end.

Zimbabwe’s international reserves were recorded at approximately US$540 million as of October 31. The total budget for 2025 is set at R145 billion, which equates to about R8,000 per person. By comparison, South Africa’s per capita government spending is about R36,000.

Despite Ncube’s projections of economic recovery, the power outage that disrupted his budget presentation starkly underscored the persistent challenges Zimbabwe faces.

By fLEXI tEAM