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Happiness Zengeni Business Editor
Net domestic funding in the 10 months to October closed at $163,69 million after making repayments of $243,9 million. According to the latest statement from the Accountant-General’s department domestic loans and Treasury Bills inflows to Government were at $405,6 million. Loans amounted to $161,08 million and TBs were at $244,5 million.

The Government repaid $155,52 million of TBs and $86,4 million.

Analysts say that while it looks like Government is repaying its debt without hiccups, the reality is that they are simply rolling over — issuing new TBs to pay off old ones.

The amount of TBs outstanding is increasing even further with the payment of the 13th cheque.

“If Old Mutual and NSSA fail to take them up on private placements, Government might find it difficult to repay the old maturing ones. Is it not possible that some of the funding is coming through by way of deposits for projects?” said an analyst with a local firm.

For the better part of the year, Government has issued TBs to raise money to fund recurrent expenditure and to pay off the Reserve Bank of Zimbabwe debts.

Revenues have failed to meet the target with the total closing at $3,107 billion against a target of $3,27 billion.

Tax revenues were at $2,81 billion against a $3 billion target.

Resultantly Government incurred a $91,96 million deficit. Treasury is targeting an overall cash deficit of $78 million (0,6 percent of GDP) in 2014.

“Because of the deficit, the Treasury Bills and the loans provide bridging finance to cover the unfunded expenditures and smoothen spending patterns,” said market analyst Miss Fiona Chigwida.

Last year, according to the RBZ annual report, Government closed the year with $241,32 million outstanding domestic debt instruments.

According to the Ministry of Finance the remaining stock of pre-2013 domestic payments arrears amounting to $23 million should be extinguished by end-2014.

“However, given the very tight resource constraints in the 2014 Budget, it would be very difficult for us to continue reducing the total stock of arrears of domestic payment in 2014.

We plan to eliminate the total stock of end-2014 domestic arrears by end-2016,” said Finance Minister Patrick Chinamasa in communication with the International Monetary Fund.

There are suggestions for Government to open the treasury bills to foreign investors who may want expose themselves to Government risk while there are calls to make the bills tradable and offer a good yield to maturity.

This comes after Meikles Limited recently said they could not offload their TBs because they were poorly structured while Seed Co at its analysts briefing this month said they were negotiating for a 5 percent coupon rate.