adminAddressing the media in Harare yesterday on post budget developments Minister Biti said Government projects were affected by below forecast inflows from diamond sales and a sharp increase in the civil service wage bill.
“Budget support for service delivery in such areas as health, education, agricultural extension services and social protection and rehabilitation and construction of capital projects was therefore compromised,” he said.
He also said limited inflows meant that he had not budgeted for elections this year, but set aside funds for a constitutional referendum and a national census.
His utterances are in contrast to the position held by President Mugabe that national elections will proceed this year with or without a new constitution.
Minister Biti said his Mines and Mining Development counterpart Obert Mpofu had indicated that inflows from the sale of Marange gems would, however, boost national coffers this month.
Cumulatively, actual revenue collections for January and February amounted to US$488 million against targeted inflows of US$549 million.
Inflows from diamond sales totaled only US$19,5 million against expected collections of US$77 million as no auctions were conducted in January and February.
In February, collections totalled US$227 million against forecast inflows of US$270 million while expenditure weighed in at US$286 million against the US$269 million approved expenditure framework.
Of the total amount spent US$254 million went to recurrent programmes with the Government’s civil service wage bill accounting for US$187 million.
In fact, a total of US$229 million was eventually paid in civil service wages due to salary arrears from January when Government workers got a pay rise.
Minister Biti said Treasury was pressed for financial resources and would not be able to fund national elections in addition to the census and the referendum.
“We have budgeted for the referendum and national census (to be conducted in August 2012). Those are two elections we cannot afford a third one,” he said.
Minister Biti said a huge Government civil service wage bill was clouding Government’s capital projects as salaries gobbled 70 percent of the inflows.
But increased revenue inflows are expected this month after diamond auctions were finally carried out and Minister Biti anticipates US$320 million in collections with diamond sales accounting for US$41 million.
The pressure on fiscal resources saw Treasury disbursing a paltry US$29 million for capital projects that included infrastructure, payment of farmers for wheat deliveries and settling arrears to seed and fertiliser companies.
Revenue inflows will have to improve significantly, especially from diamonds to be able to sustain the country’s US$800 million budget for capital projects.
Meanwhile, the Finance Minister revealed that President Mugabe had appointed Mr Khupukile Mlambo and Dr Charity Dhliwayo as deputy governors of the Reserve Bank of Zimbabwe.
The minister also said that Mr Dzinotizei Mutasa, Mr Brains Muchemwa, Dr Rudo Faranisi, Mr Kennias Mafukidze and Professor Tony Hawkins had been appointed to constitute the central bank’s monetary policy committee.
This has been done as part of overall reforms at the central bank to enhance its performance and that includes measures to recapitalise the apex bank.
Online Reporter