Government to launch Budget Strategy Paper

budget, to allow broader participation by stakeholders.
Presenting the Mid-Year Fiscal Policy Review, Minister Biti said the strategy paper to be presented in Cabinet next month will cover the period 2012-2014, guided by Short-Term Emergency Recovery Programme and the recently launched Medium Term Plan.

The minister said the strategy paper would outline the broad budget policy framework for the Medium Term Plan.
“Accordingly, the BSP is a tool meant to facilitate broader participation and in-depth debate on the national priority issues.
“This approach, unlike in previous years, allow more time for stakeholders’ participation during the consultative and formulation phases of the budget and, hence, enriching the budget system,” said Minister Biti.

He proposed to introduce the first BSP for 2012 to Cabinet next month after which it would be brought to Parliament for debate before it is sent to a wider range of stakeholders.
Zimbabwe is adopting the Budget Strategy Paper that allows long-term planning on the back of macro-economic stability ushered in by the introduction of multiple currencies in 2009.
This year’s Mid-Year Policy Review is an indication that the country has taken a shift from previous reviews given the economic stability.

Zimbabwe’s economy is expected to grow by a significant 9,3 percent in 2011 after having picked up 8,1 percent in 2010.
During the hyperinflationary period it was difficult for Treasury to come up with long-term fiscal measures given the volatility of the economy.
A stable economy characterised by a stable growth rate, low inflation, limited market distortions and consistent policy implementation allows long-term forward planning.

The unstable macro-economic environment took the mode of mini-year budgets.
“This follows the positive economic developments since 2009, which now anchor the prevailing stable macro-economic environment.
“We now have an opportunity to revert back embracing processes rooted to sustain the integrity of a 12 monthly planning and implementation cycle for the budget,” he said.

The new budgetary strategy will see Government taking a three-year planning horizon in a bid to improve effectiveness and efficiency in budgetary processes.
Analysts have welcomed the long-term planning process saying this will help guide preparation of national budgets.
“This is an important component of the Government’s approach for improving the preparation of budgets and the management of public finances.

“It is also good because the document would be made available to the public for debate thus it improves public transparency and accountability,” said a Harare-based analyst.
BSP would establish broad principles that will guide the 2012 Budget process and to set broad fiscal parameters, indicate the key Government strategies, policies for the management and reform of revenues and expenditure.

Analysts added that it would also assist in the understanding of the fiscal situation and Government’s proposed budget strategies amongst Government officials, business and the general public.