THE budget deficit is projected to widen to $1,8 billion this year as runaway expenditure outweighs revenue generated, Finance and Economic Development minister Ignatious Chombo has said.
BY BUSINESS REPORTER
In 2016, Zimbabwe incurred a budget deficit of $1,4 billion.
Presenting at the pre-budget seminar in Victoria Falls yesterday, Chombo said cumulative expenditures were projected to reach $5,582 billion up from the budgeted $4,1 billion.
“This would raise the budget deficit for the full year from $400 million to $1,82 billion mainly financed through Treasury Bills and recourse to overdraft at the Reserve Bank. Honourable members will agree that this is not sustainable and is undesirable,” Chombo said.
Recurrent expenditure in the period January to September amounted to $2,97 billion against a planned disbursement of $2,7 billion. Revenue collections in the period were up to $2,812 billion from a target of $2,741 billion.
Government has failed to live within its means with expenditure remaining unchecked. The bulk of the expenditure is towards salaries for the civil service, thereby failing to allocate resources to capital projects. In the nine months to September, expenditure under the Development Budget underperformed by $54,1 million during the same period.
This, Chombo said, has “meant deferring implementation of a number of ZimAsset priority projects and programmes” that are necessary to accelerate economic growth and development.
Analysts say expenditure will accelerate in the run-up to next year’s elections, as government rolls out populist policies to curry favour with the electorate.