Source: Govt bursts budget by $1,2bn – DailyNews Live
Ndakaziva Majaka 27 February 2017
HARARE – President Robert Mugabe’s stone-broke government last year
exceeded its expenditure by a jaw-dropping $1,2 billion, with foreign
travels chewing nearly $45 million, new figures reveal.
Figures from the Consolidated Revenue Fund (CRF) released on Friday,
showed that in the period running to November 2016, while government had
budgeted to collect revenues amounting to $3,1 billion, expenses overshot
collections to close the month at $4,3 billion.
Vehicles, plant and mobile equipment grew to an astronomical $14,9 million
against a $959 000 budget, while a paltry $920 650 was spent on building
acquisition instead of the earmarked $7,5 million.
During the 11 months, domestic travel gobbled $6 million against a budget
of $5,3 million.
There was fiscal revenue under performance in the first 10 months of 2016,
with fiscal revenue falling 9,8 percent year on year to $2,8 billion.
However, the data also highlights government’s wage expenses marginally
went down on the back of Finance minister Patrick Chinamasa’s civil
service reforms.
In his 2017 budget, Chinamasa proposed an 8,9 percent decrease in fiscal
expenditure to $4,1 billion in 2017, with the public sector wage bill
projected at $3 billion while $520 million will be directed towards
capital expenditure.
Against this, Zimbabwe’s fiscal deficit is projected at $400 million in
2017 from $1 billion recorded in 2016.
Zimbabwe’s economy is in the throes of a debilitating crisis which has
been worsened by shortages of cash and declining production levels.
Zimbabweans continue to experience pain and chaos at banks as they
desperately seek to withdraw their money.
This is despite the government’s recent introduction of bond notes in its
desperate bid to improve the availability of money.
Last month, one of the government’s advisers, Ashok Chakravarti, revealed
that the country only had $304 million in hard cash in circulation,
including $73 million in bond notes.
“If you look at comparative studies from other economies cash to deposit
ratio should be between 10 (percent) to 12 percent. If an economy has got
less than 12 percent, it faces a liquidity crisis … We need $900 million
in cash to have adequate liquidity,” he said.
And as Zimbabwe’s economy continues to die, the World Bank last year
downgraded the country from its list of improved economies to the
unflattering tier of struggling countries, as Harare’s political and
economic turmoil continues to escalate.
In its publication titled Africa’s Pulse, the Bretton Woods institution
said the country had failed to register significant economic growth over
the past few years.
“Zimbabwe’s fiscal deficit has deteriorated as remedial actions have been
limited and this has resulted in the country registering a negative
correlation between the cyclical components of government consumption and
GDP,” it said.
Meanwhile, economists also say average incomes in Zimbabwe are now at
their lowest levels in 60 years, with more than 76 percent of families
having to make do with less than $200 a month.This, they add, means that
poverty levels have reached “numbing levels”, amid indications that the
situation will worsen in 2017, as the government continues to demonstrate
its inability to fix the rot.
COMMENTS
But this is the most important man in the world – surely he is entitled to do what he likes? I mean – just print another $1.2 billion and all will be well. If you see the interview of him being asked about the currency in Zimbabwe he understands it all so well! “They keep there money in their pillows and the their mattresses – we shall send the army and the Police in to search their houses!” Mugabe is a Milton Friedman of his time. His printing Press is the key to all wealth. Simple. Chatham House, CFR, IMF and The World Bank put him there to show the world how it is all done.
Zimbabwe government expenditure exceeds income by USD 1.2 billion in last financial year.
Now we know why the Reserve Bank of Zimbabwe (RBOZ) had to sell USD 1.35billion of Treasury Bills to Zimbabwe’s commercial banks.
Those commercial banks will never see those USdollars again.
Result – all Zimbabwe’s commercial banks are insolvent ! The worst off is CBZ that holds a billion in RBOZ bills which is roughly 4 times its shareholder funds. Best advice to depositors comes from Comrade Robert Mugabe himself who recently said that he does not bank money in ZW – he keeps it at home securely under his bed. At 93 he is still economically savvy if nothing else !
The only thing that will save the banks in ZW is the bond notes or in other words Zimdollar no 6 (bond notes)