Parly demands national supplementary budget

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Blessings Mashaya
THE parliamentary portfolio committee on Budget and Finance has demanded answers from Finance minister Mthuli Ncube on why he is failing to come up with a national supplementary budget to address effects of the current inflation ravaging the economy.

In a report presented in the National Assembly recently, the Felix Mhona-chaired committee said Mthuli must consider presenting a national supplementary budget.
 “The committee is concerned with the absence of the supplementary budget despite the glaring need for such given the fact that the country is experiencing three-digit inflation levels… Although on average utilisation has been 46 percent,  there is widespread imbalance on the utilisation,” read the report.
“It is no secret that employment costs have increased from the budgeted $17,8 billion on account of the salary review effected from January 2020, recruitment of additional 4 713 health personnel to fight Coronavirus (Covid-19), payment of risk allowances to the frontline health workers, effective April 2020, as well as review of health specific allowances for health personnel. Recently, the government awarded its employees a 50 percent salary adjustment and a non-taxable US$75 allowance across the board.
“The minister acknowledged in his statement that inflationary pressures continued to undermine budgeted provisions — including the cost of providing public services — but no budgetary adjustments were made to cater for that. The minister also disclosed when he appeared before the committee on June 3, 2020 that additional 400 nurses and 200 medical staff recruited in March led to an increase in employment costs from $1,2 billion in
February to $1,7 billion in March. However, this does not add up as this translates to more than $800 000 per person.”
The committee also raised concerns over the high importation of foodstuffs.
“The committee is concerned with . . .  activity in the economy which has led to significant imports of foodstuffs that amount for example in 2018, $403 million, in 2019, $465 million and $229 million in the first four months of 2020.
“Added to fuel imports that amount to at least US$80 million a month, this puts significant pressure on the available forex, the committee, therefore, calls upon the fiscal authorities to complement the monetary authorities who have put in place measures to promote productivity in the economy.
These include the reduction of the bank policy rate from 70 percent in November to 35 percent, 25 percent, and further again to 15 percent in March 2020. The statutory reserve ratio on bank deposits was reduced from five percent to 4,5 percent.”
Mthuli is yet to respond to the report in Parliament.

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