Zimbabwe overspends by $550million to support agriculture

Zimbabwe overspent by $549 million to support recovery of the country’s agriculture sector in 2016 to help the country recover from its worst drought in three decades, Finance Minister Patrick Chinamasa said today. 

Presenting a review of the 2016 budget, Chinamasa said the interventions were the major drivers behind the overall $902.2 million budget overrun.

The agriculture sector had an initial budget provision of $66 million.

The southern African country is recovering from a devastating drought a year ago that left 4 million people in need of food aid.

It expects to harvest 2.1 million tonnes of maize this year following good rains, against demand of 1.8 million tonnes.

Chinamasa said budget expenditures for 2016 amounted to $4.9 billion, against planned expenditures of $4 billion.

Government also incurred previously unbudgeted expenditure of $134 million when it capitalized Agribank ($30 million), ZB Bank ($20 million), Post Office Savings Bank, ($20 million), Cotton Company of Zimbabwe ($30.5 million), Infrastructure Development Bank of Zimbabwe, ($18.7 million) and Small and Medium Enterprise Development Corporation, ($15million).

The 2016 employment bill also accommodated outstanding December 2015 employment costs of $138.4 million, as well as bonus payments of $177.8 million for the previous fiscal year.

Government is seeking to reduce the overall employment costs bill, inclusive of pension payments and employer contributions to medical insurance and social security from 81 percent of total revenue in 2015 to 65 percent by 2019.

“The implementation of the Public Service Wage Bill rationalisation measures, approved by cabinet in November 2015, has had a positive impact of reducing Government’s baseline Employment Costs bill, from a monthly level of around $262 million in 2015 to around $252 million in 2016,” said Chinamasa.

“Notwithstanding the impact of gains achieved from the rationalisation of the Public Service establishment, the overall employment costs bill for 2016 remained unsustainably high at $3.21 billion, accounting for 91.7 percent of total revenue,” he said.

Support towards operations and maintenance for ministries and government departments incurred excess expenditures of $220 million.

The economy is expected to grow by 3.7 percent, driven by recoveries in agriculture (21.6 percent, Mining (5.1 percent) Electricity and water (2.5 percent) construction (2 percent) and real estate at two percent.

President Robert Mugabe did not attend Chinamasa’s presentation while vice presidents, Emmerson Mnangagwa and Phelekezela Mphoko were present.- The Source

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