Prof. Mugano Tears Apart Zim 2026 Budget as ‘Anti-People’ and ‘Ceremonial’
Economist Professor Gift Mugano labeled Zimbabwe’s 2026 National Budget, presented by Minister Mthuli Ncube, as an “anti-people” and “poor budget” that prioritises revenue generation over genuine economic growth and will likely fuel inflation.
Key Stories
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Fiscal Crisis Unmasked: Government failed to disclose US$1.7 billion in accumulated expenditure arrears between 2022 and 2024, raising serious questions about the credibility of fiscal discipline.
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Fake GDP Growth: Mugano dismissed the claimed growth of the economy to US$52 billion as “fake or rigged,” noting that extreme poverty levels have nearly doubled under the minister’s tenure, rising from 29% to 49%.
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Taxation Will Kill Demand: The Professor warned that the continuous, egregious increases in taxation will slow down demand, constrict supply, increase the cost of doing business, and deepen informalization.
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10% Gold Royalty Slammed: The hike in gold royalties to 10% on deliveries above 2,500kg—one of the highest rates globally—was criticized for creating an immediate incentive for formal macro-producers to informalize and smuggle their gold.
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Political Overspending: Budget utilization shows a critical lack of financial control, as “political ministries,” like Transport, overspent by 267% by the third quarter, while key economic ministries like Industry and Commerce only utilized 23% of their allocated funds.
The core of the critique centered on the credibility of the government’s numbers, with the discussion highlighting the disconnect between the official nominal GDP of $52 billion and the “real feel” experienced by the average citizen. Mugano argued that the re-basing to achieve this figure is suspect, pointing out that an economy supposedly doubling its size is failing to absorb jobs, with 87.7% of the population now working in the informal sector, up from 76% in 2019. The fact that $1.7 billion in verifiable invoices—for items like dam construction ($700M) and input support ($380M)—were accumulated outside the budget system and revealed in a supplementary document, further proved that the entire budgeting process has become “ceremonial,” lacking sincerity and accountability. Furthermore, the failure to pay statutory obligations like BEAM and pension funds was flagged as a moral issue that destroys confidence and kills businesses.
The speakers agreed that Minister Ncube’s reliance on continuous, high taxation is a self-defeating strategy, driven by what Mugano called a “financial mathematician” approach focused solely on numbers over economic impact. High taxes—including the 10% royalty on gold and export taxes on subdued base metals like lithium and chrome—create perverse incentives for the formal sector to informalize and evade the tax burden, shrinking the legitimate tax base. This pattern is evident in the collapse of the formal beef value chain and the low revenue collected from the 2% IMT tax, which only yielded $48 million from the 80% informal economy last year. The desperation is further demonstrated by new levies like the 15% digital tax and betting tax.
Conclusion and Call to Action
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Business leaders are urged to anticipate high regulatory risk and deepening informalization going into 2026, driven by a desperate Zimbabwe Revenue Authority (ZIMRA).
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The formal sector must brace for increased US dollar inflation, which Mugano called a “silent killer” that many companies are failing to incorporate into their financial strategies.
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Business associations (Chamber of Commerce, Chamber of Mines) must unite and present a consolidated, evidence-based paper to Parliament before the budget is passed to demand corrections and prevent further damage to the formal economy.
