Treasury to stick to initial budget limit
THE Government will stick to its overall 2022 national budget envelope of $900 billion despite large resource requirements submitted by line ministries, which are in excess of $3 trillion, Finance and Economic Development Minister Professor Mthuli Ncube has said.
While most presentations by line ministries lamented the inadequacy of the expenditure ceilings already provided by Treasury with most bids being more than by 100 percent of the proposed ceilings, Minister Ncube said the country did not have capacity to finance all expenditures.
He said the total requests by line ministries was “beyond our capacity, and more fundamentally, poses challenges from a prioritisation point of view”.
Minister Ncube added that the Government would continue to be dependent on the revenue generation capacity of the economy and its ability to borrow sustainably.
According to his presentation at the 2022 pre-budget seminar in Victoria Falls, next year’s budget envelope is projected at $800 billion and to get to $900 billion it would be complemented by liquidation of International Monetary Fund (IMF) SDRs equivalent to about $40 billion and domestic borrowing of $64 billion.
Despite plans to borrow $64 billion from the domestic market, Minister Ncube said “no recourse to central bank overdraft facilities will underpin the 2022 national budget.”
He said the Government would continue to strengthen the Public Finance Management System in order to address risks to budget sustainability, especially the accumulation of domestic arrears and extra-budgetary expenditures.
This will be done through further rationalisation of the recurrent expenditures and redirecting of savings towards infrastructure development.
Treasury also intends to rationalise subsidies to ensure that such expenditures are explicitly budgeted for, quantified and approved through the Annual Estimates of Expenditure.
“Disbursements by Treasury will be strictly limited to available revenue and within the approved budget,” reads part of his presentation.
Expenditure is projected at $849,51 billion comprised of recurrent expenditure $610,60 billion, compensation of employees $290 billion, capital expenditure $238.91 billion and inter-governmental transfers amounting to $40,03 billion. The remainder is going for debt servicing.
“Whilst I acknowledge and appreciate the current challenges, critical is that we become more efficient and effective in the use of available resources in line with our value for money and Programme Based Budgeting principles.”
Interestingly Minister Ncube said despite limited resources, some Ministries still fail to utilise their budget allocations year in year out.