Mthuli Ncube dismisses ministries’ budget demands

Prof. Mthuli Ncube

FINANCE Minister Mthuli Ncube has dismissed over $112 billion in total budget 2020 proposals made by State departments for the coming financial year.

Ncube told MPs at the just ended pre-budget seminar in Victoria Falls that the economy will not be able to fund the demands by various ministries with eight having already overshot receipts according to the Treasury chief.

The minister said the budget constraint presents a serious challenge in the prioritisation and allocation of resources across government ministries given the increased needs of society.

“Mr Speaker Sir (Jacob Mudenda), I have noted the huge resource requirements being demanded by all line ministries. As you are aware, the capacity of the budget to finance expenditures is dependent on economy’s capacity to generate revenues and in the current economy, that revenue generation capacity is still low due to a number of challenges.

“Analysis of only eight bids submitted by Defence, Health, Home Affairs, Agriculture, Local Government, Transport and Labour and Social Welfare ministries indicate resource requirements of $112 billion which far exceed the total resource envelop for 2020 Budget,” said Ncube.

Last year’s budget was only $4.1 billion before it was revised to $10 billion in the 2019 mid-term monetary policy review. The demands by the eight ministries reflect a budget increase of more than 2700% before other ministries are included.

According to Ncube, the budget ceilings that have been given by Treasury are derived from the anticipated resources envelope from taxes and what government can borrow from the market without destabilising the economy.

“We need to be mindful that unrestrained expenditures financed through unsustainable means are the major source of economic instability we are battling today.

“I have to admit however that this year is unique due to high inflationary environment, and hence we would like to announce that the total expenditure ceiling is being revised upwards from $28 billion by a factor of above 30% to provide a window to finance additional budget requirements over above the ceilings already provided,” said Ncube.

Ncube warned ministries to desist from unauthorised expenditures through incurring debt from supplies and service providers and to plan diligently as some ministries have inefficient programme managers.