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This special session comes amid reports that for almost four months now, ministries have gone on zero disbursement from Treasury except for salaries and running costs.
The development has raised many questions on the reality of the budget presented by Finance Minister Tendai Biti for this year.
Deputy Prime Minister Arthur Mutambara yesterday told the House of Assembly that the special Cabinet meeting would discuss the depressed revenue inflows, among other issues.
Instead of disbursing 25 percent of budget allocations to ministries in the first quarter of the year, Professor Mutambara said, most Government departments had received only seven percent of what they were allocated in the 2012 national budget.
The DPM was responding to a question from Mutasa North legislator Mr David Chimhini (MDC-T) on the status of Government revenues in light of low disbursements to ministries.
Finance Minister Tendai Biti also acknowledged the poor state of the country’s coffers saying he will announce his mid-term policy review on 12 July in which projections in last year’s budget will be reviewed downwards due to poor economic performance so far this year.
“There is going to be a major revision of the budget of $4 billion and part of the reason is that our revenue has failed therefore the figure of $4 billion will be revised downwards. The main reason we are going to revise it downwards is because of the underperformance of our diamond revenue. We have collected $30 million when we expected $240 million,” he said.
He also said the poor agricultural season in which tobacco output is expected to be 130 million kilogrammes instead of the previously expected 150 million kilogrammes has also contributed to the downward revision.
Maize output is expected to be 900 000 metric tonnes from an expected 1,4 million metric tonnes.
“As a result of shrinkages in agricultural output we are also going to review the GDP figures. For the first five months, the economy has been in comatose, we have to take drastic actions. There would be austerity, we would have to live within our means, we would have to sell silverware and reform our mining sector,” Minister Biti said.
Initially the economy was expected to grow by nine percent based on mining and agriculture performances.
A source close to developments said Cabinet would look at the revenue disbursement movement machinery to find out what is happening with special focus on revenue leakage relating to mining amid concerns that there is over-emphasis on diamond revenue from Chiadzwa as if that is the only mineral or mining activity in the country.
The under-performance of the economy due to lack of funding for agriculture amid reports that the anti-land reform lobby had shifted to starving this sector of funding to create self-fulfilling prophecies that the programme was a disaster from the beginning will also come under discussion.
Only 4 000 hectares of wheat have been planted against a target of 50 000 hectares, amid concerns that the import bill for wheat is going to be a nightmare for a depressed fiscus.
“The chickens are coming home to roost for the Finance Minister. The inclusive Government has been thriving on the momentum of the pre-inclusive Government agricultural boom, that momentum has been lost now (due to dearth of funding),” a source in the Finance Ministry said.
President Mugabe is on record decrying the funding of key Government programmes since the beginning of Minister Biti’s tenure with the national purse.
Addressing traditional leaders in Manicaland in June last year, the President slammed Minister Biti for politicising funding for agriculture.
“Murume watakapa basa rezvemari haana ndangariro sedzatinadzo (the man we have the job of Finance Minister does not think like us). To him and some of his collegues, agriculture is not an important area because they think that if they finance this sector, they will be strengthening Zanu-PF. They do not want to see the economy prospering,” the President said.
Ironically, in his 2011/12 National Budget statement, Minister Biti acknowledged that agriculture had contributed 33 percent to GDP.
What is disturbing, the source said, is that donor money is filtering into the system in the direction of ministries run by MDC-T ministers, a case in point being the $50 million for water development that was provided by Britain and Germany through the Department for International Development.
“The spectre of a parallel budget has necessitated this meeting,” the source said.
The money has been earmarked for Matabeleland North Province and Prime Minister Morgan Tsvangirai will be going to launch the programme in a constituency being eyed by the wife of Water Resources Development Minister Samuel Sipepa Nkomo.
Mrs Nkomo is reported to be eyeing Tsholotsho North constituency held by Zanu-PF Politburo member, Professor Jonathan Moyo, whom the MDC-T has been trying to oust from Parliament.
Given the fallout in funding ministries, Minister Biti is reportedly mulling what he calls a “’priority of priorities” which analysts say is akin to “a budget of a budget” since the national budget itself is a statement of priorities.
“This (priority of priorities) amounts to an admission that the finances of the country are not being handled well,” the source said.
Minister Biti has come under fire from various sectors over his handling of the critical finance portfolio, the latest barbs coming from University of Zimbabwe economics professor Tony Hawkins who rapped the MDC-T for policy incoherence and for crediting itself with turning around the economy.
In an article titled: “MDC slated over economic revival claims,” Prof Hawkins pointed out that dollarisation brought an overnight change to the economy.
“There is nothing that the MDC did in that regard to turning around the economy. It was a result of dollarisation. That is where the change came from not as a result of their implementing any praiseworthy policy. The MDC is pretty much out of its depth,” Prof Hawkins said.
The then Acting Finance Minister Patrick Chinamasa introduced dollarisation in a budget presented in January 2009, two weeks before the inclusive Government was sworn in on 13 February that year.
Online Reporter