The two houses of Parliament- the House of Assembly and the Senate- yesterday fast-tracked Finance Minister Patrick Chinamasa’s supplementary budget before adjourning to 28 October when the second session of the eighth Parliament is expected to be begin.
President Robert Mugabe is expected to officially open the second session.
Deputy Justice Minister Fortune Chasi asked the leaders of the two houses, the Speaker of Parliament Jacob Mudenda and the President of the Senate Edna Madzongwe, to invite Mugabe to open the session more as a tradition because the new constitution does not require him to.
Below are the details of the supplementary budget:
APPROPRIATION (SUPPLEMENTARY) 2014 BILL (H.B. 11, 2014)
THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (MR. CHINAMASA): Thank you Mr. President. In my 2014 Mid Year Fiscal Policy Review Statement to this august House on 11 September, 2014, I indicated that the 2014 National Budget had incurred expenditures outside budgeted levels with some votes expected to exceed originally approved appropriations necessitating revision of the budget.
In this regard, additional provisions relating to employment costs, procurement of grain, crop inputs support programme, contingent liabilities, parliamentary vehicle loan scheme and region 5 games, will be required.
The 2014 National Budget provides for US$2.998 billion on employment costs with outturn to December projected to be around US3.2 billion. This will result in cost overrun of US$210 million emanating from salary adjustments effected in January 2014. This intervention was necessary to improve the welfare of the public servants. To finance this shortfall, I am proposing to avail an additional amount of US$86 million, with the balance being met through reallocations.
Contingent liabilities have arisen as a result of Government guarantees on both public and private companies for various lines of credit from China Eximbank, particularly from financing agriculture related programmes. Guarantees amounting to US$23.5 million relating to loans borrowed by ZISCO Steel (US$7.5 million), Industrial Development Corporation (US$4.36 million) and Farmers World (US$11.57 million) will be called up by year end. Of the guaranteed amount, US$11.9 million has already been called up. A provision of US$23.5 million is therefore required to cater for these contingent liabilities.
Zone Six Games
As part of preparations for the forthcoming Zone Six Games to be held in Bulawayo, in December 2014, Government had set aside US$3.5 million in the current budget for upgrading facilities. The requirement has since been revised to US$14.5 million. Therefore, additional resources amounting to US$9 million will be required to make this event successful.
To boost our strategic grain reserves with the view to ensure food security in the country, funding mechanisms have been put in place to enable GMB to procure 250 000 tonnes valued at US$97.5 million. To date, resources amounting to US$86 million have been mobilised in support of grain procurement against a target of US$120 million. Of resources available, US$36 million is already budgeted for, with the balance of US$50 million mobilised through issuance of AMA bills.
GMB has to date received grain deliveries amounting to 218 000 tonnes and valued at US$85 million. Of this tonnage, 126 000 tonnes valued at US$49 million have been paid for, leaving a balance of 92 000 tonnes. In this regard, an additional budget provision of US$32.8 million is required to meet the full requirements for grain procurement and related handling charges.
Outstanding payments to Inputs Suppliers
Government unveiled a US$90 million for the 2013/2014 Vulnerable Input Support Programme. As at January 2014, an amount of US$39 million was outstanding to input suppliers. The 2014 budget had not provided for this expenditure, hence the proposal for a budget provision of US$30 million with the balance being met from budget reallocations. Government also owes input suppliers US$33.2 million for inputs related to the 2011-2012 financial years. A decision has been made to liquidate this debt through issuance of Treasury Bills. An additional provision of US$33.2 million will be required to facilitate the liquidation of the amount.
Agriculture Inputs Support Programme
You recall, in my 2014 Mid-Year Fiscal Policy Review Statement, I alluded to Government arrangements to mobilise US$252.4 million to finance an inputs package, targeting grain, cotton, soya bean, cow peas and livestock production. For the period up to year end, Government will mobilise US106 million targeting procurement of seed and fertilizers. In order to ensure effective implementation of the programme, beneficiaries will be expected to contribute US$30 towards the grain inputs package estimated to cost around US$115.50.
Parliamentary Vehicle Loan Scheme
2.1. In May 2014, Government unveiled a Parliamentary Vehicle Loan Scheme amounting to US$14.4 million through a facility from CBZ which has seen all parliamentarians accessing vehicles.
2.2. The budget provides for US$4.6 million, leaving a balance of US$9.8 million. Of this, US$8.4 million is required by year end for loan repayment obligations.