Mthuli to present Mid-Term Fiscal Policy Review, Supplementary Budget

Business Writer

Zimbabwean Finance and Economic Development Minister, Professor Mthuli Ncube, is expected to present the Mid Term Fiscal Review statement and supplementary budget tomorrow afternoon at a time the country is facing runaway inflation and an unstable exchange rate.

This week’s order papers for the National Assembly notified that the Minister of Finance and Economic Development will on Thursday 28th July present, not only the Mid-term Fiscal Policy Statement, but also a supplementary budget for this year.

Minister Ncube presented the $927,3 billion 2022 National Budget for 2022 in November last year and economists say the supplementary budget is inevitable because the assumptions which underpinned the 2022 budget have completely changed.

The current budget is now out of sync with reality “and it must be changed,” economics professor, Gift Mugano said.

These assumptions have been radically changed by both internal and external factors, that is, excessive money supply and the contagion effects of the Ukraine/Russia war which has been transmitted to Zimbabwe through the increase in costs of fuel, food and fertilisers.

The 2022 budget was developed under the assumptions that the economy will grow by 5,5 percent and that the country would receive normal to above normal rainfall, subdued Covid-19 pandemic, relatively stable exchange rate and declining inflation as well as favourable international mineral prices.

“As observed, the assumptions, which are sufficient and prior requirement which must be in place in order for the country to meet the set targets are in this case not sound, realistic, rigour and relevant to the economic situation in Zimbabwe.

“From the four assumptions, only favourable international mineral prices is the only one which is realistic. The other assumptions are not,” said Prof Mugano.

According to some economists, the supplementary budget would be twice the current budget. This will be the first time Minister Ncube presents the supplementary budget since he was appointed in 2018.