Govt seeks US$330m to cover budget deficit
THE Government is negotiating external loans worth US$330 million to finance the national budget gap for 2024, according to a report on public debt released by the Treasury last week.
It also intends to issue Treasury Bills and bonds amounting to $5,8 trillion to fund the gap.
The estimated funding gap for the budget stands at $9,2 trillion, comprising $4,3 trillion in the budget deficit and $4,9 trillion needed to repay and maturing Government securities.
The Government is currently drawing down US$40,8 million from existing loans from the Arab Bank for Economic Development in Africa, the International Fund for Agricultural Development (IFID), the OPEC Fund for International Development, and the Kuwait Fund.
To supplement these existing facilities, the Government is seeking new loans from Broughton Capital Group (US$100 million), Dinosaur (US$125 million), and ABSA and Standard Bank South Africa (US$105 million).
In line with the projected economic growth of 3,5 percent next year, total revenue collections in 2024 are estimated at $53,9 trillion or 18,3 percent of the GDP.
About $51,2 trillion would be tax revenue. Expenditures are projected at $58,2 trillion.
The proposed expenditures for next year take into account safeguarding the purchasing power of incomes of civil servants, ensuring the continuous provision of essential social services to vulnerable groups, maintaining and rehabilitating
Government infrastructure, prioritising support for ongoing public infrastructure projects, preventing the accumulation of arrears as well increasing funding for capital projects through public-private partnerships (PPPs), Minister Ncube said.
The 2023 National Budget had an overall deficit of $336,8 billion or 1,5 percent of gross domestic product and financing requirements of $575,5 billion, which included amortisation of loans and Government securities, amounting to $248,6 billion.
Due to inflationary pressures experienced in the economy, which peaked during the period May to June 2023, the macroeconomic fiscal framework was revised, widening the budget deficit in nominal terms to $3,6 trillion which led to revision of the borrowing plan.
During the period January to September 2023, the Government, through the issuance of Treasury bills, managed to mobilise resources amounting to $305,9 billion, against a revised borrowing plan target of about $276,3 billion.
The target was surpassed during the first half of 2023, as the Government made deliberate efforts to mop up excess liquidity in the market, to curtail the growth in money supply and hence the rate of inflation, as well as for budgetary cashflow smoothening.