…As Mthuli seeks Parliament approval for ZW$107 billion over spent
….‘Perm Sec, Chief Finance Officers are useless’ -Mliswa
Emmanuel Chitsika
From 2018 to 2021 the government of Zimbabwe through the Ministry of Finance and Economic Development made several claims of national budget surpluses which seemed to signify economic growth.
In November 2018, Finance Minister Mthuli Ncube reported that the country witnessed a budget surplus of around ZW $ 29 million saying it was the first achievement of its kind in a long while.
During the first quarter of the year 2021, another budget surplus in the excesses of ZW$ 9.8 billion was recorded and the ministry claimed success on the back of continued fiscal consolidation measures and sustained macro-economic stability.
According to the finance ministry, the nation rode on successes of a two-year Transitional Stabilization Programme that ended in December 2020 with government managing to restore macro-economic stability amid growing domestic-market confidence while at the same time digitisation also enhanced domestic revenue collection with Zimbabwe Revenue Authority (ZIMRA)’s 2021 first quarter collections clocked ZW$ 90.62 billion that was 4.73 percent ahead of targeted ZW $ 86.52 billion. The economy was projected to grow by 7.4 percent while annual inflation presumably nosedived by end of March 2021.
“On the fiscal front, a budget surplus of ZW$ 9.8 billion was recorded as government continued fiscal consolidation for ensuring stability and restore market confidence. Success of stabilisation reforms is being evidenced through significant drop in inflation rate to 240.6 percent by March 2021 from 837.5 percent in July 2020.
“Similarly, the exchange rate has stabilised at around US$ 1: ZW$ 84 throughout the first quarter,” Ncube was quoted as saying.
The total budget of ZW $ 421.6 billion was reportedly anchored on sustainable economic recovery and growth through increasing focus on strategic priorities.
Ncube in November 2021 also projected the 2022 economic growth to be 5.5 percent.
“In 2022, the economy is projected to grow by 5.5 percent, underpinned by higher output in mining, manufacturing, agriculture, construction and tourism. However, the parallel market premiums and market indiscipline present challenges on efforts of containing inflation,” said Ncube.
ZW $ 107 billion unlawfully ‘overspent’
After all the purported economic gains in form of surpluses declared, the minister went on to preside over a massive illegal expenditure that had no blessing of Parliament as an ‘overseer’ to government spending.
During the 2020 financial year, the ministry spent ZW$ 100 690 788 418 while ZW$ 6 783 930 028 was spent the previous year without parliamentary knowledge and approval.
The minister violated Section 307 of the Constitution that compels him to seek condonation of an unnecessary spending from Parliament within 60 days after establishing the extent of the unauthorised spending.
Norton legislator Themba Mliswa said the move shows how bad the situation is in Zimbabwe
“It’s a violation of the Public Finance Management Act, an admission that government is not in control of the economy because there is no surplus to talk about and it’s clear local currency has no value. There is no financial discipline in the country. Ideally, the minister is supposed to come to Parliament, present his intention to go for a supplementary budget if need be but he did not.
“There is no clarity on what the money was used for. The minister should present his concerns before embarking on supplementary budgets. We talk of the Chief Finance officers, the Permanent Secretary in the ministry who have just become useless. There is no one to inform the minister since the Permanent secretary is failing. What are all those employees doing then? Instead of advising the minister on the ministry’s needs, those guys are doing nothing.
“Every year the whole budget has been under-funded. We (as MPs) have been burning the midnight candle approving a budget of which only 30 percent is disbursed. Why approving the budget if the full amount budgeted for is not disbursed. The government has become law unto themselves, they ignore laws that guide them for example disbursing devolution funds to local government without any enabling Act as was evident when the deputy minister of local government Marian Chombo admitted that there was no law legalising the transfer of the moneys,” said Mliswa.
Economist Caleb Gwaindepi said if government cannot quantify the overspending they had it’s a sign of declaring a surplus that never was.
“If government had not quantified the overspending which they are asking forgiveness for, it means they cooked up their accounts to project a favourable balance (surprise) when in actual fact it wasn’t. Surplus means income exceeds expenditure, so if surplus had already considered the overspending, it means it does not have effect on the budget.
“If ever the overspending exceeded surplus; it means government lied on the surplus. If government fails to account for their expenditures, then there is high risk of the ministry funding other programmes resulting in lack of accountability, transparency which in turn affects credibility of government and the Treasury in particular as an institution leading to lack of confidence on part of people thereby affecting the integrity of the institution
“Government seems to be abusing its position with the Executive infringing on the liberties of other arms of state. The ministry of finance should not wantonly spend without Parliament approval because that affects the latter’s oversight role. Government would be suppressing and abusing parliament to authorise their illicit dealings by stamping and authorising illegal deeds,” said Gwaindepi.
Political analyst Dr Davidson Mugodzwa said there is no rule of law in the country as shown by the minister not following stipulations of the law.
“The minister is operating above the law. The mere fact that he does not hesitate to overspend let alone ignore seeking parliamentary approval is a clear sign. That has been the trend with this ruling party that they operate above the law.
“Nothing is going to be done to reprimand the deviant behaviour. Zanu PF has got parliamentary majority so they are going to rubber-stamp the minister’s apology and he will be pardoned thereby fuelling overspending tendencies. If it had been done in any other country which respects the rule of law there could be protests as we speak because the amount spent is too much,” argued Mugodzwa.
However for the year 2022, Ncube claimed the proposed estimates including Constitutional and Statutory Appropriations are at ZW$ 927.3 billion (18.3 percent of GDP) which falls short of requests submitted by line Ministries, Departments and Agencies (MDAs) and presented during the 2022 budget hearings which were in excess of ZW$ 2.7 trillion.
Government has also been often accused of deliberately raising public external debt. As at September 2021, the total public debt stood at US $ 13.7 billion with public external debt standing at US$ 13.2 billion which now includes blocked funds from RBZ and domestic debt of US$ 532 million.
