Mid-term fiscal policy review on

Godfrey Marawanyika

FINANCE minister Herbert Murerwa is set to announce his mid-term fiscal policy next month and consultations with stakeholders have already begun.



ana, Arial, Helvetica, sans-serif”>Fiscal policy will look at the country’s economic performance for the first six months, among other things. It will also look at the country’s revenue and expenditure patterns, and performance of each line ministry.


Murerwa will face the problem of accommodating the extra four new ministries announced by President Robert Mugabe during his cabinet reshuffle.


The extra ministries, analysts say, will have to be factored into government expenditure for the next coming months.


Deputy Finance minister David Chapfika on Tuesday confirmed that they planned to announce the mid-term fiscal policy next month.


“Normally the mid-term fiscal policy is announced at the end of June. We implement the fiscal policy to complement the monetary policy but that always depends on the prevailing situation on the ground,” Chapfika said. “Consultations have been going on for sometime.”


He said they hoped to have finished all the consultation work by June.

Central bank governor Gideon Gono yesterday announced his monetary policy review, which the government hopes to complement.


In his mid-term fiscal policy for the period ending June 2004, the budget set out to collect revenue amounting to $2,964 trillion, but the actual realisation was $2,966 trillion.


In the first six months of last year total expenditure amounted to $3, 644 trillion, against a target of $4,194 trillion.


With actual expenditures and revenues pegged at $3, 644 trillion and $2,966 trillion respectively, the budget deficit for the period ended June 2004 was $880 billion.


Value-added tax collections to June 2004 were $825,1 billion against a budget target of $653,2 billion.


By the end of last year, cumulative revenue collections and expenditures and net lending realised amounted to $8,072 trillion and $8,85 trillion, yielding a deficit of $775 billion.


The cumulative outturn for expenditure and net lending for the fiscal year ending December amounted to $8,85 trillion against a target of $9,01 trillion, yielding an under expenditure of 2%.


Total financing requirements for last year were $1,639 trillion, with 99,9% of this amount having been sourced from the domestic market through the issuance of treasury bills.


“Current expenditure registered $7,634 trillion against a target of $7,658 trillion, with capital expenditure registering an outturn of $1,167 trillion against a target of $1,243 trillion,” a treasury quarterly bulletin for July-December 2004 says.


“Expenditure control measures instituted during 2004 benefited from roll out of the system to all ministries. This facilitated limiting expenditure to available resources.”


The government last year implemented the 2005-2006 — Towards a Sustained Economic Growth programme, as a new economic blueprint.


Last year government for the first time in three years did without a supplementary budget.


Another problem Murerwa will face is how to come up with a solution to contain inflation which over the past three months has remained within a range of 123% to 129%, which could result in missing the 30% to 50% year-end target.

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