Highlights from Mthuli Ncube’s budget review

No extra budget needed, for now

Ncube has stayed away from asking for more money from Parliament. Unless there is a major shock, he says, there will be no need for a supplementary budget this year.

He said: “In the outlook to December 2021, expenditure target of Z$421.6 billion will be maintained assuming continued containment of expenditures, save for exigencies managed through reallocations, where necessary.”

So far this year, the Government has managed to live within its means. The government raised an estimated Z$198.2 billion in revenues between January and June and spent Z$197.6 billion.

Diaspora’s support for economy keeps growing

During the first six months of the year, Zimbabweans living abroad sent home a total of US$746.9 million. Over the same time last year, they sent US$288.7 million. Remittances are projected to reach US$1.3 billion by year end, Ncube said.

The contribution of Diaspora remittances to the economy is growing.

“Diaspora remittances and other transfers, which constitute the secondary income account, are projected to continue driving the current account balance as was the case in 2020. Personal transfers from Zimbabweans in the Diaspora are expected to remain steady and resilient as the economies in key source markets recover from the Covid-19 induced slow-down, allowing them invest in assets back home.”

Sold: Gold refinery

In December, Ncube announced that the government was privatising Fidelity Printers and Refineries. This is the company that refines and exports gold. Gold producers would control 60% of Fidelity, with central bank keeping 40%.

Ncube has now announced that this deal is now down. Ten miners have agreed to buy the 60% for US$49 million. This will be the first time that the refinery will be in private hands since it was established in 1988.

While Ncube did not name the ten miners, a structure announced last year said participation would be based on average gold sales over the previous three years. This means among the potential will be the biggest gold producers, such as Kuvimba’s Freda Rebecca, which is now the number one producer, as well as Caledonia Mining, which runs Blanket, and RioZim.- NewzWire

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