State finances in shambles

via State finances in shambles – Southern Eye 16 March 2014

Zimbabwe’s recurrent expenditure rose to 96% of revenue collected in January, crowding out critical capital projects, figures obtained from Treasury have shown.

Tax revenue at $266,6 million was lower than the target of $278,6 million, while total expenditures for the same month amounted to$235,9 million.

Treasury attributed the declining revenues to company closures, the under-performance of the mining sector on the back of fluctuating mineral prices on the international market and a shorter working period due to the annual shut down which extended to part of January.

Platinum output marginally rose to 1 015kg against 1 001kg produced in the previous month while nickel output was higher at 1 559 tonnes from 1 235 tonnes produced in December.

Gold output decreased to 1 109kg in January 2014 compared to 1 151kg produced during the month of December.

“Recurrent expenditures constituted about 96% of total expenditure leaving about four percent for capital expenses. Of the total recurrent expenses, employment costs took up about 60,5 %. During the month, total capital disbursements amounted to $9,8 million,” Treasury said in its monthly economic update for January obtained.

The February data is not yet out. “The manufacturing sector remains under pressure with a number of companies facing acute financing challenges. In the outlook, prospects for the agricultural sector look positive and are expected to breathe hope in agro-processing and other related industries, as well as improving liquidity situation in the economy,” Treasury said.

Of the total revenue collected, $256,8 million or 96,3% was tax revenue, with the remaining 3,7% being non-tax revenue. The major tax revenue heads were Value Added Tax, Pay As You Earn, and Excise Duties contributing 36%, 24% and 13% respectively. Non-tax revenue was mainly driven by interest, dividends and rent from government property, contributing $8,6 million out of the total non-tax revenue of $9,8 million collected during the month under review.

The latest available export data, for December, show exports for that month were at $251,8 million, 85,6% lower than the $467,5 million earned in November 2013.

On the other hand, imports slowed to $576,6 million in December from $594,3 million in the previous month. In total, imports for 2013 were $7,7 billion against exports of $3,5 billion, giving a trade gap of $4,2 billion.