THE government will stick to its overall 2022 national budget envelope of $ 900 billion despite the significant resource requirements submitted by the line ministries, which exceed $ 3 trillion, said the Minister of Finance and Development economics, Professor Mthuli Ncube.
While most presentations from line ministries lamented the inadequacy of spending ceilings already provided by the Treasury, with most bids representing more than 100% of the proposed ceilings, Minister Ncube said the country had failed. the ability to finance all expenses.
He said the total requests by line ministries was “Beyond our capabilities, and more fundamentally, poses challenges from the point of view of prioritization”.
Minister Ncube added that the government will continue to depend on the income generation capacity of the economy and its ability to borrow sustainably.
According to his presentation at the 2022 pre-budget seminar in Victoria Falls, next year’s budget envelope is projected at $ 800 billion and to reach $ 900 billion, it would be supplemented by the liquidation of SDRs from the International Monetary Fund (IMF ) equivalent to approximately $ 40 billion and domestic borrowing of $ 64 billion.
Despite plans to borrow $ 64 billion in the domestic market, Minister Ncube said “no use of central bank overdraft facilities will support the 2022 national budget.”
He said the government will continue to strengthen the public financial management system to address the risks to fiscal sustainability, especially the build-up of domestic arrears and extra-budgetary spending.
This will be achieved through further rationalization of operating expenses and a reorientation of economies towards infrastructure development.
The Treasury also intends to rationalize grants to ensure that these expenditures are explicitly budgeted, quantified and approved as part of the annual expenditure estimates.
“Treasury disbursements will be strictly limited to available revenue and within the approved budget,” part of his presentation read.
Spending is projected at $ 849.51 billion including recurring spending of $ 610.60 billion, employee compensation of $ 290 billion, capital spending of $ 238.91 billion and intergovernmental transfers from an amount of $ 40.03 billion. The rest goes to debt service.
“While I recognize and appreciate the current challenges, it is essential that we become more efficient and effective in the use of available resources in accordance with our value for money and program budgeting principles. “
Interestingly, Minister Ncube said that despite limited resources, some ministries still do not use their budget allocations year after year.