Zim records $500 million budget deficit  

ZIMBABWE recorded over $500 million budget deficit in the 11 months to November 2019, official figures show.
The latest development is in sharp contrast to Finance minister Mthuli Ncube, pictured ’s assertion that the country registered a budget surplus for the greater part of last year.
Statistics from Treasury showed that government spent $18,329 billion during the 11 months against total revenues of $17,7 billion while in November the country incurred a $884,5 million budget deficit against a targeted deficit of $577,1 million.
Total expenditure for November amounted to $4,406 billion against a target of $3,082 billion resulting in a variance
of $1,324 billion.
The country’s revenues, at $3,522 billion outperformed targets of $2,506 billion resulting in a positive variance of $1,016 billion.
“The positive performance is mainly recorded on taxes on goods and services which contributed $2,086 billion against a budget of $1,380 billion, Taxes on income contributed $749,3 million against a budget of $500,3 million, intermediate money transfer tax contributed $451 million against a budget of $357,4 million,” Treasury said.
Expenditure outlay on employment costs for the month of November 2019 amounted to $1,104 billion against a target of $535,7 million.
Expenditure on goods and services amounted to $652,4 million against a target of $490,4 million giving a variance of $162 million mainly a result of higher than projected payments for institutional provisions, rentals and services charges.
“Capital expenditures for the month of November amounted to $2,131 billion against a target of $1,605 billion giving a variance of $526,2 million. The variance is mainly as a result of capital transfers to GMB for strategic grain reserves and purchase of farming inputs for the coming 2019/2020 cropping season,” the Finance ministry said.
Meanwhile, Ncube has says government will ensure fiscal discipline to rein in an inflation rate that’s the highest in a decade and a yawning budget deficit.
“If you look at what has caused the crisis in first place, it has been budget deficits in the past and we are dealing with that, making sure that it moves from double digits to single digits by the end of this year. The government is making sure that we cut back on government waste, deal with the current account deficit,” he said.
Deputy Finance minister Clemence Chiduwa said the shrinking tax base will see the country’s budget deficit rise exponentially and constrain the country’s ability to fund operations.
He said government was aware of the tax burden to businesses but stressed that defaults would only worsen the country’s already dire economic prospects.
He noted that taxation remains one of the necessary evils that we all have to live with and to foster economic growth and development, government requires a sustainable source of funding for social programmes and public investments.
Chiduwa said this year, treasury budgeted to collect $58,6 billion, and in order to avoid the undesirable impact of deficits, the 2020 macro fiscal framework espouses a low budget deficit of around 1,5 percent of GDP, implying expenditure of $63,6 billion.

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