TREASURY recorded a budget surplus of ZW$803,6 million between January and June on the back of fiscal discipline in line ministries and government, as the Transitional Stabilisation Programme (TSP) bears fruit, Finance minister Mthuli Ncube said yesterday.
By Nyasha Chingono
Zimbabwe also registered a positive current account for the first time since the adoption of the multicurrency regime in 2009. Presenting his mid-term fiscal review in parliament, Ncube said the attainment of a fiscal surplus, combined with a current account balance of US$196 million during the first quarter from a deficit of US$491 million for the same period in 2018, signalled improved confidence in the TSP.
Ncube attributed the budget surplus to the newly-introduced local currency which he said had restored the country’s monetary policy and enhanced competitiveness for exports while maintaining a strict import regime.
“This reflects a sharp contraction in imports through import management, against a moderate increase in exports in line with export promotion under implementation,” Ncube said.
“During the first half of the year, TSP reforms first and foremost continued to focus primarily on containing the twin fiscal and current account deficits, which over the years instigated instability in the economy.
“To government’s credit, we have put in motion an irreversible process for rebuilding a stable, strong and democratic macro-economic environment.
“The fiscal and current accounts are now balanced and under control, while the tools of monetary policy have also been activated — thus representing an essential and complete toolkit for dealing with various macro-economic challenges facing the economy.”
During the first half of 2019, monthly revenue collections performed above target of ZW$139,9 million to give cumulative revenues of ZW$4,99 billion, against a target of ZW$4,15 billion, giving a positive variance 20,2%.
However, government incurred unavoidable expenditures due to the Cyclone Idai disaster that swept through eastern Zimbabwe, spending ZW$4,2 billion against a target of ZW$3,7 billion, translating to 15% over-expenditure of ZW$532 million between January and June 2019.
“The negative variance is a result of inescapable and unforeseen expenditures on both current and capital heads, arising from higher-than-anticipated inflation, exchange rate fluctuations, drought and the devastating Cyclone Idai,” Ncube said.
“Accommodated critical inescapable expenditures were related to the following: cushioning allowance of ZW$63 million to civil servants that was paid from January to March; cost of living adjustment allowance (COLA) amounting to ZW$400 million implemented starting from April; implied pension review of ZW$62,1 million; Implied Nssa review of ZW$3,6 million; filling of critical posts requiring ZW$58 million; cyclone Idai mitigation, with ZW$61,8 million; subsidised mass public transport of ZW$30,9 million up to June; and social protection and infrastructural programmes,” Ncube said.
Government also managed to tackle burgeoning domestic debt which stood at ZW$8,8 billion as at end June 2019 down from ZW$9,5 billion as at December 31 2018.