HomeBusiness DigestDevelopment Cabinet' broke

Development Cabinet’ broke

By Allen Tichaona

MORE than three weeks after the announcement of the new “development Cabinet”, the government looks clueless about where it will get funding for the new ministries created

by President Robert Mugabe.

The President created new four full ministries and one ministry of State in the middle of the current financial year and no money had been budgeted for these new ministries.

The new ministries – together with the old ones – will need trillions in the form of new cars, offices, furniture, support staff and other ministerial benefits.

The new ministries are Public and Interactive Affairs, Information and Publicity, Women Affairs, Gender and Community Development, Rural Housing and Social Amenities, and Economic Development.

Analysts have questioned the rationale of appointing 31 ministers and 12 deputy ministers and the creation of a ministry such as the Public and Interactive Affairs when the country’s Budget was overstretched.

The government needs over $5 trillion to import food and it is paying billions of dollars in subsidies for locally produced maize after it announced it was going to buy maize at over $2 million a tonne but selling it at $600 000 a tonne to millers.

Chen Chimutengwende the new Minister for Public and Interactive Affairs said t his ministry was getting its money from the president’s Office.

“We are under the President’s Office and that is were we are getting our funding from but for further details contact the Ministry of Finance,” said Chimutengwende.

David Chapfika, deputy Minister of Finance reasoned that the government should be given time before one starts asking the source of the funds.

“I think you should give it more time and see where the money is going to come from and then start asking,” Chapfika said.

He also added that one should also look at the objectives for the creation of the new ministries, whether it was beneficial or detrimental to the country.

John Robertson, an independent economic consultant, said the government was going to be forced to print moremoney.

“They are going to be forced to print money because of the costs of importing food and they are also deeply in overdraft,” Robertson said.

But Finance Minister Herbert Murerwa told Standard Business that some money would be found from the Budget without elaborating.

“The funds will be found, we will rationalise the Budget,” Murerwa said.

When challenged further by Standard Business, Murerwa asked this reporter to call him later. When this paper tried to contact him again he was unreachable.

Robertson ruled out the possibility of government borrowing because it has wiped out savings over the past four years due to the negative interests rates.

Moreover, the government’s coffers with the Reserve Bank of Zimbabwe are reportedly dry. Its domestic debt has also shot up to $8 trillion as of last month and it looks to balloon further.

The government in the 2005 National Budget had said expenditures would total $27,5 trillion against revenues of $23 trillion. The budget deficit was anticipated to be 5% of the Gross Domestic Product but analysts said this actually worsen to 15% of the GDP.

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