Prof. Mthuli Ncube grovels before Biti in Parliament over budget overspending

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HARARE – Finance and Economic Development Minister Mthuli Ncube is expected to appear before legislators soon seeking condonation for over-expenditure amounting to $107 billion in fiscal years 2019 and 2020 contrary to what was approved by Parliament.

Analysts said the exercise, though futile given the passage of time since this happened, was critical for accountability and transparency, although it was more preferable for the minister to quickly propose a supplementary budget so that everyone appreciates the need to overshoot the national budget.

The Treasury chief will thus need to provide a convincing explanation on the justification for and nature of programmes that saw him loosen the purse strings so much outside of obligations parliament agreed to by the National Assembly lawmakers.

Mthuli recently tabled a Financial Adjustments Bill that was published in the Government Gazette to condone the unauthorised expenditure incurred by the Ministry of Finance and Economic Development for the years 2019 and 2020.

Legal thinktank, Veritas Zimbabwe, says the Bill will be brought to Parliament because, under Chapter 17 of the Constitution, is responsible for deciding how much money the Government can spend and what the money should be spent on.

This also ensures − so far as Parliament can − that the Government does not misspend the money or spend more than has been allocated to it.

If the Government has misspent or overspent money, Veritas said section 307 of the Constitution requires that “… the Minister responsible for finance must introduce a Bill into the National Assembly seeking condonation of the unauthorised expenditure.

“The Bill … must be introduced into the National Assembly without delay and in any event no later than sixty days after the extent of the unauthorised expenditure has been established.”

The Bill asks Parliament (belatedly) to condone expenditure by the Ministry of Finance amounting to $6,7 billion for  the year 2019 and $100,69 billion for the year 2020.

Neither the Bill nor its memorandum, Veritas noted, explains why or how the ministry incurred the expenditure; but suggested to find that out, one needed to look at the Auditor-General’s reports on appropriation accounts and fund accounts for the two years concerned.

According to the Auditor-General’s report for 2019 which was tabled in the National Assembly on the 16th June 2021: “During the year under review, Treasury incurred unauthorised excess expenditure amounting to $6 806 340 654 as a result of Unallocated Reserve transfers made to line Ministries amounting to $7 386 995 654.

“This exceeded the approved budget of $580 655 000 in contravention of Section 305 (5) of the Constitution of Zimbabwe,” the Auditor General said. “Treasury as the manager of the public purse did not adhere to legal provisions on the sanctioning of excess expenditure by Parliament,” Veritas said.
The Auditor-General’s figure for excess expenditure is slightly more (by $22 410 626) than the amount for which the Bill seeks condonation; which the Minister of Finance will explain when he delivers his Second Reading speech in the National Assembly.

In the Auditor-General’s report for 2020, which was tabled in the National Assembly on the 8th March 2022 , she said: “The approved budget for Unallocated Reserve as per the Appropriation (2020) Act, 2019 was $1 394 632 000. However, the Ministry of Finance transferred to line Ministries a total of $102 085 420 418, resulting in unauthorized excess transfers of $100 690 788 418.

“The excess expenditure is still to be condoned by Parliament in terms of Section 307 of Constitution of Zimbabwe.”

Huge amounts

Veritas said the amounts of excess expenditure, nonetheless in Zimbabwe dollars, are constantly losing value through inflation, but the think tank noted that even so they remain “very large – huge in fact:”.
The 2019 amount, at the official rate of exchange in December 2019 ($16,7 : US$1) was worth US$406,2 million. The 2020 amount at the official rate of exchange in December 2020 (($81,8 : US$1) was worth US$1, 2billion.

The Minister of Finance, as the manager of the public purse, will have to explain to the National Assembly why he overspent so much in 2019 and 2020. He has a great deal of explaining to do.
Section 307 of the Constitution, Veritas Zimbabwe said, requires the minister to introduce a condonation Bill into the National Assembly no later than 60 days after the extent of unauthorised expenditure has been established.

The Auditor-General’s report for 2019 was tabled in Parliament on the 13th June 2021, just over a year ago; the extent of the overspending must have been established some time before that, so the Minister has waited a year before seeking condonation from Parliament.

The Auditor-General’s report for 2020 was tabled on the 8th March 2022, 97 days ago; again the Minister has illegally delayed coming to Parliament.

Economic analyst Professor Gift Mugano said in future “ the most ideal situation is to do a supplementary budget that will help everybody to align with the new conditions. When you seek condonation for 2019 and 2020, it is now a futile exercise, who cares what happened, which we do not know.

“We are now just be told belatedly, where were we when these things were happening, in a broader way, this also affects confidence issues,” he said, adding that in the future we will not trust that authorities can stick to approved national budgets.

“It is fine (that Minister Ncube seeks condonation), it’s better to be late than never, but it must never be repeated,” Professor Mugano said. – Business Weekly