‘Nothing new expected from National Budget’

via ‘Nothing new expected from National Budget’ 27 November 2014 by Victoria Mtomba

FINANCE minister Patrick Chinamasa this afternoon presents the 2015 National Budget amid concerns from stakeholders on how he will reduce recurrent expenditure while at the same time increasing the much-needed capital expenditure.

Treasury since 2009 had been spending more than 75% of the budget on government salaries and wages while infrastructure continued to collapse.

Economists do not expect Chinamasa to present a budget different from the past since nothing has changed in the national economic environment.

Government has not heeded the International Monetary Fund (IMF) calls to reduce its wage bill. The IMF has urged government to cut the wage bill.

Chinamasa told a breakfast meeting recently that the wage bill was “embarrassing and unsustainable” and government was working to address it.

For the past five years, the National Budget has been increasing together with the recurrent expenditure.

In 2009, the budget stood at $934 million, $2,1 billion in 2010, while in 2011 it stood at $2,7 billion, and $3,4 billion and $4 billion in 2012 and 2013 respectively.

The 2014 National Budget was $4,1 billion and was anchored on the agricultural sector and the performance of the mining sector.

Chinamasa expected the economy to grow by 6,1%, but the growth rates were reduced by half to 3,1 % due to the effects of commodity prices which declined in 2014.

Employment costs as a percentage to total expenditure rose from 47% in 2009 to 73% in 2014 against an international benchmark of 30%.

Analysts project that the 2015 National Budget will be $4,3 billion and the recurrent expenditure will gobble 83% of the budget.

“Nothing has changed from the previous budgets that have been presented.

“The country now needs to invest more into capital expenditure to stimulate growth in the economy. Maybe, government now needs to take tough decisions
and cut its labour force so that they channelled funds to infrastructural development,” an analyst said.

Although the budget comes at a difficult time there was some hope for the country as the European Union removed restrictive measures on Zimbabwe which meant that Zimbabwe may receive budgetary support from the EU which was not the case before.