FINANCE Minister Tendai Biti yesterday presented a US$3,2 billion national budget for 2011 projecting that the economy would grow by a further 9,3% during the year, mainly spurred by expansion in mining and agriculture.
Biti said Zimbabwe would rely largely on domestic revenue to fund its budget as donors continued to hold back aid.
The greater part of the 2011 budget –– US$2,7 billion (compared to US$2,2 billion in 2010) –– would be financed domestically as Biti had maintained cooperating-partner support for the vote of credit at no more than US$500 million.
Biti said the bulk of the developing-partner aid would not be channelled through the fiscus.
“Zimbabwe is relying on its own investments, not much external funds are coming in…We are surviving on a cash budget and want to move away from a cash economy in 2011,” Biti said.
The US$500 million vote of credit is a significant drop on the US$800 million anticipated this year with only US$300 million finding its way into the fiscus.
“Indications are that developing-partner support in 2011 will largely be channelled outside the government budget system,” said Biti. “While the Multi Donor Trust Fund, the Zim-Fund, has been successfully activated, with confirmed contributions by donors standing at about US$70 million, this is being administered outside the fiscus as well.”
Biti said the bids submitted by various departments for the 2011 budget were at US$11,3 billion with recurrent expenditure accounting for US$3,8 billion, but it had to be rationalised to US$2,7 billion.
“Mr Speaker Sir, of the proposed 2011 budget of US$2,7 billion, I propose applying US$2,2 billion or 80% towards recurrent expenditures,” said Biti.
“Of this amount, the amount required for the wage bill places a big challenge when looked at against all the other requirements, including support to health and education delivery services, agricultural services, social protection, payment of service providers and maintenance of infrastructure.”
Only US$550 million of the revenues would go towards capital expenditure.
“In 2011 we anticipate that GDP will grow by 9,3% to $8 billion.
“Our initial projections were that our GDP would be $5,9 billion in 2011 … we are ahead of schedule,” said Biti.
He said the country is currently facing economic, political and institutional problems.