Government sets 2023 budget formulation guidelines

Nqobile Bhebhe, Senior Business Reporter

THE Ministry of Finance and Economic Development has set guidelines for 2023 national budget formulation for line ministries that seek to further buttress checks and balances of procurement and contract processes and curb malpractices.

The Government recently said all supply contracts are now subject to a value for money audit review before payments are made, a measure that has been introduced to root out overpricing and procurement malpractices by some suppliers.

The Treasury then suspended payments to Government contractors, ministries, Departments and Agencies (MDAs) after it noticed that they were submitting invoices for goods and services priced using parallel market rates.

Last week, the Government said it will take punitive measures against public officials who are complicit to overpricing and procurement malpractices while suppliers involved in illicit financial activity will be blacklisted from future supply contracts.

The next budget will be the third annual budget underpinning the operationalisation of the nation’s vision of a prosperous and empowered upper middle-income society by 2023.

In a Treasury budget circular dated 22 August titled: “Preparation for the 2023 Budget Including the Indicative years 2024 and 2025,” issued by the Finance and Economic Development Permanent Secretary, Mr George Guvamatanga, it outlines several critical issues that line ministries should adhere to as they prepare their strategic plans.

The circular details on linkage of planning and budgeting improving efficiencies and effectiveness in budget management and mainstreaming climate change in budgeting.

“Accordingly, this circular as a prelude to the Second 2023 budget call circular seeks to formally pronounce the commencement of the budget strategic planning phase and to provide initial guidance to ministries, departments and agencies (MDAs) on the preparation of the 2023 national budget,” wrote Mr Guvamatanga.

He said malpractices in the procurement, pricing and payments of goods and services remains a major source of leakages of public funds and are causing distortions in the market thereby compromising implementation and delivery of projects and programmes under NDS1.

“In this regard, revamping of the current frameworks of goods and services procurement becomes critical in the management of both the 2022 and 2023 budget.

“In planning for programmes and projects for 2023, MDAs are directed to institute measures and systems that ensure procurement of goods and services reflect real market prices and provide value for money.

“All MDAs are compelled to review all existing contracts and align them to the 2023 budget towards operationalisation of a more comprehensive and transparent framework for the procurement of goods and services under the Target Central Procurement framework and where applicable, price guides.”

Going forward, for infrastructure projects, inclusion in the annual budget should be subject to provision of duty signed contracts with prior approval by Treasury on pricing and alignment with national priorities and only budgeted programmes and projects should be prioritised during the course of the financial year.

He said effective linkage of planning and budgeting is critical towards deepening and aligning implementation of programmes and projects to available resources given the limitations of the fiscal space.

As such, the delivery and achievement of our NSD1 targets will be anchored on the ability of ministries, Departments and Agencies ( MDAs) to efficiently prioritise and sequence their programmes and projects and align their contributions towards the 14 priority areas consistent with the targets and outcomes outlined in the National and sub-sector development results framework.

“Consistent with the development co-operation policy and procedures manual, MDAs are requested to indicate ongoing and intended or expected support from development partners. MDAs should also indicate co-financing from the budget,” said the Treasury.

Guided by NSD1 and the 2023 budget strategy paper, in coming up with the 2023 infrastructure investment plan, Mr Guvamatanga said MDAs should provide impactful infrastructure interventions critical for economic and social transformation and social returns, those that build resilience, mitigate risks to life and the those that allow opening of markets and expansion to under-serviced markets.

Mr Guvamatanga said noting the current infrastructure delivery challenges, it is critical to strengthen the existing institutional capacities in planning, implementation and monitoring and evaluation of projects to ensure quick turnaround and reduction of cost overruns.