Trea­sury ex­ceeds ex­pen­di­ture by $410m

Chronicle (Zimbabwe) - - National News - Pamela Shumba Se­nior Re­porter

TREA­SURY ex­ceeded its ex­pen­di­ture tar­get for 2016 by $410 mil­lion be­tween Jan­uary and Septem­ber this year due to pres­sure from debt servicing and un­bud­geted grain im­ports as a re­sult of drought.

Fi­nance and Eco­nomic De­vel­op­ment Min­is­ter Pa­trick Chi­na­masa yes­ter­day said carry-overs of 2015 bonus pay­ments into 2016 and pay­ment of De­cem­ber 2015 salaries for the rest of the civil ser­vice in Jan­uary 2016 re­sulted in a fault start fi­nan­cial year for the Gov­ern­ment.

The El-Nino in­duced drought, which ne­ces­si­tated grain im­por­ta­tion of 336 309 tonnes at a to­tal cost of $134.5 mil­lion, has been a ma­jor im­ped­i­ment.

“These ac­tiv­i­ties pushed ex­pen­di­tures to $3.4 bil­lion against a tar­get of $2.99 bil­lion as at Septem­ber 2016. This re­sulted in ex­pen­di­ture over­run of $410 mil­lion for the pe­riod Jan­uary to Septem­ber,” he told leg­is­la­tors dur­ing a 2017 pre-bud­get sem­i­nar in Bu­l­awayo.

“Re­cur­rent ex­pen­di­ture ac­counted for $2.9 bil­lion (84 per­cent) out of the to­tal ex­pen­di­tures of $3.4 bil­lion. Em­ploy­ment costs alone ac­counted for $2.4 bil­lion (95 per­cent) of rev­enue of $2.5 bil­lion as at Septem­ber 2016.”

Min­is­ter Chi­na­masa said the pre­vail­ing ex­pen­di­ture sit­u­a­tion was un­de­sir­able as it ex­posed the coun­try to a num­ber of risks that in­clude do­mes­tic debt trap and ac­cu­mu­la­tion of ar­rears to salaries and ser­vice providers, among oth­ers.

“The high re­cur­rent ex­pen­di­tures in­clu­sive of em­ploy­ment costs ren­ders the coun­try highly con­sump­tive and hence anti-de­vel­op­men­tal.

Cu­mu­la­tive ex­pen­di­ture to Septem­ber amounted to $3.48 bil­lion against a tar­get of $2.99 bil­lion,” said Chi­na­masa. “Ma­jor ex­pen­di­ture driv­ers were em­ploy­ment costs, grain pro­cure­ment and debt servicing.”

Min­is­ter Chi­na­masa said re­duc­ing the wage bill was a huge chal­lenge as he urged fo­cus on in­creas­ing pro­duc­tiv­ity so that the coun­try can sta­bilise.

He said rev­enue un­der-per­for­mance, cou­pled with in­escapable ex­pen­di­tures, will re­sult in a higher fi­nanc­ing gap. Cu­mu­la­tive ex­pen­di­tures to year end are es­ti­mated at 4.69 bil­lion.

“This is against a re­vised rev­enue pro­jec­tion of $3.65 bil­lion. This will widen the fi­nanc­ing gap ex­clud­ing debt re­pay­ment to $1.04 bil­lion from $150 mil­lion ini­tially an­tic­i­pated. The gap be­comes wider when ad­di­tional obli­ga­tions aris­ing from debt servicing are con­sid­ered,” said the min­is­ter.

He stressed the need to curb im­ports and boost ex­ports so as to tame the trade deficit.

“To re­duce this trade deficit, Gov­ern­ment will con­tinue to im­ple­ment im­port sub­sti­tu­tion, and re­strict the im­por­ta­tion of non-es­sen­tials so as to pre­serve the stock of our for­eign cur­rency in the coun­try. Such mea­sures in­clude the Statu­tory In­stru­ment 64 of 2016,” said the min­is­ter. — @pame­lashumba1

Min­is­ter Pa­trick Chi­na­masa

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