Zimbabwe 2016 Budget Highlights

Some highlights from the 2016 budget presentation by Finance Minister Patrick Chinamasa in Parliament today.

• Economy seen growing by 2.7 percent in 2016 VS 1.5 percent in 2015
• Inflation to average -1.2 percent in 2016
• Total budget envelope for 2016 at $4 billion
• Recurrent expenditure, at $3.685 billion, is 92.1 percent of budget
• Revenue projected at $3.85bn in 2016, $150 million deficit (1.1pct of GDP) to be funded through local borrowings
• Finance Minister pins hope for economic recovery on re-engagement with international lenders
• Education gets biggest share of budget, $810 million, while home affairs ($396mln) and defence ($357mln) get a combined 19pct of budget
• Health allocated $330 million in the 2016 budget
• Government wage bill seen at $3.919 billion in 2016
• Streamlining of the wage bill, mainly targeting youth officers, agricultural extension workers, non-payment of salaries to teachers at non-government schools and reduction of student teacher allowances, set to save $14.2 million monthly or $170mln annually
• Civil service employment figures, minus army establishment, jump 36pct since dollarization, from 203,000 in 2009 to 276,000 in 2014.
• Exports are expected to grow to $3,7 billion next year from $3,4 this year
• Imports projected to decline marginally from $6,3 billion in 2015 to $6,2bn next year.
• Gold production to reach 20.1 tonnes in 2016, VS 18.7 tonnes in 2015 and still below all-time high of 29t in 1999
• Royalties on gold reduced to 3pct from 5pct
• Government to take over Ziscosteel’s debt and lay off all workers, new investor sought after collapse of Essar deal

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