Prof. Mthuli Ncube rejects proposed $3 trillion 2022 budget

Zimbabwe Finance Minister Mthuli Ncube arrives at the Parliament of Zimbabwe to present the national annual budget, a few days after the introduction of a new currency in the country, in Harare, on November 14, 2019. (Photo by Jekesai NJIKIZANA / AFP) (Photo by JEKESAI NJIKIZANA/AFP via Getty Images)

HARARE – Some extravagant Government ministries and departments want Treasury to craft a $3 trillion 2022 national budget, but Finance and Economic Development Minister Mthuli Ncube, sticks to his guns, insisting on the $900 billion envelope as previous planned.

In coming up with the $3 trillion budget proposals, the ministries lamented the inadequacy of the expenditure ceilings already provided by Treasury with most bids being more than by 100 percent of the proposed ceilings.

However, Mthuli insisted the country does not have financial stamina to bankroll all the expenditures.

He said the total requests by line ministries were “beyond our capacity, and more fundamentally, poses challenges from a prioritisation point of view”.

Mthuli argue that Government will continue to be dependent on the revenue generation capacity of the economy and its ability to borrow sustainably.

According to his presentation at the 2022 pre-budget seminar in Victoria Falls, next year’s budget envelope is projected at $800 billion and to get to $900 billion complemented by SDRs liquidation worth about $40 billion and domestic borrowing of $64 billion.

Despite planning to borrow $64 billion from the domestic market, Mthuli said “no recourse to Central Bank overdraft facilities will underpin the 2022 National Budget.”

He insists the Apex Bank should not be used as a “cash box” by Government.

He said Government will continue to strengthen the Public Finance Management System in order to address risks to budget sustainability, especially the accumulation of domestic arrears and extra-budgetary expenditures.

This will be done through further rationalisation of the recurrent expenditures and redirecting of savings towards infrastructure development.

Plans are also to rationalise subsidies and ensuring that such expenditures are explicitly budgeted for, quantified and approved through the Annual Estimates of Expenditure.

“Disbursements by Treasury will be strictly limited to available revenue and within the approved budget,” reads part of his presentation.

Expenditure is projected at $849,51 billion comprised of recurrent expenditure $610,60 billion, compensation of employees $290 billion, capital expenditure $238.91 billion and inter-governmental transfers amounting to $40,03 billion.  The remainder is going for debt servicing.

“Whilst I acknowledge and appreciate the current challenges, critical is that we become more efficient and effective in the use of available resources in line with our value for money and Programme Based Budgeting principles.”

Interestingly Mthuli said despite limited resources, some Ministries still fail to utilise their budget allocations year in year out. – Herald