Financial Gazette (Harare)
Shame Makoshori
11 October 2008
Harare — INORDINATE delays in appointing an all-inclusive Cabinet have put the 2009 national budget consultations off track as it also emerged this week that trillions of dollars were recently doled out to struggling ministries and government departments that had long exhausted their allocation.
In November last year, the Finance Ministry tabled a $7,8 quadrillion budget that constituted nearly half the country's implied Gross Domestic Product of $16 quadrillion. But much of the national budget was eroded by hyperinflation.
The March 29 elections, which extended into a run-off after Movement for Democratic Change (MDC) leader, Morgan Tsvangirai, failed to garner enough votes to avoid a run-off, also gobbled a significant portion of the budget.
President Robert Mugabe of ZANU-PF was to emerge winner of the disputed June 27 poll, boycotted by Tsvangirai following alleged state-sponsored violence against MDC supporters.
It had been hoped that government, caught in a vicious cycle of inflation, would introduce a supplementary budget to sustain its depressed ministries. But with Parliament still to resume sitting after the synchronised March elections, the entire government machinery has had to survive on the quasi-fiscal operations of the central bank in view of the serious decline in tax revenues.
Treasury sources told The Financial Gazette this week that President Mugabe recently invoked his presidential powers to direct Finance Minister, Samuel Mumbengegwi, to release additional funds after line ministries had raised the red flag. While the quantum of the resources pumped into government could not be ascertained at the time of going to print, sources hinted that the bailout package runs into several trillions of dollars.
Mumbengegwi had no kind words for this reporter when contacted for comment on Monday.
"It has nothing to do with you, zveunderstanding dzako dzenhema izvo. Kana unemakuhwa ako, ndeako, haaneyi neni. (You've not been told the truth. If you've heard rumours; that is your problem, it has nothing to do with me). So what if you know about that? Ha! ha! ha!," he said, chuckling.
The Finance Minister, whose chances of bouncing back into government are razor-thin, was also non-committal on when the 2009 national budget consultations would begin.
He said: "If the consultations begin, they will be made public. You do not have to ask."
It is however, delays in appointing an all-inclusive government that many people now find difficult to comprehend after ZANU-PF and the two MDC formations signed a power-sharing agreement on September 15.
The three parties are deadlocked on who should be allocated which ministries, with ZANU-PF insisting on controlling all the key ministries namely Finance, Home Affairs, Information, Foreign Affairs, Defence and Local Government.
The country has suffered a decade of continuous recession that has paralysed all the sectors of the economy. The crisis, characterised by 11-digit inflation of more than 11,2 million percent, has rendered budgeting an impossible exercise.
A top government official said all the ministries had exhausted their budget allocations and needed fresh funding to see the 2008 calendar through.
"We were supposed to table a supplementary budget," the official said. "But everyone had been busy with the elections so it was stopped. Two months ago Mumbe-ngegwi was directed to roll out unbudgeted funds because ministries were in a precarious state. The money has already been exhausted and the situation is bad," he said.
The official, said consultations for the 2009 national budget, which traditionally kicked off in September have since been delayed because of the standoff over the allocation of ministries.
It is now unlikely that the 2009 budget would be announced next month, which means the country may for the first time wait until early next year to see the important numbers.
With the number of ministries having been stretched to 31, in line with the power-sharing agreement brokered by former South African President Thabo Mbeki, the incoming finance minister has his/her task cut out.
The Zimbabwe Coalition on Debt and Development (ZIMCODD) said the new Cabinet should consider effective debt management to be a priority in tackling the national economic recovery agenda now and beyond.
Currently the external debt of Zimbabwe is proportional to the size of its economy.
According to the Joint External Debt Database of the international financial institutions (the International Monetary Fund and World Bank) the external debt was US$4,9 billion at the end of last year.
Almost half of that debt can be traced from the Rhodesian government during the 1970s, while part of it is due to apartheid de-stabilisation acts in the 1980s as well as the effects of the Economic Structural Adjustment Programme.
"In this view, we call for an official audit of the external debt to establish the nature and legitimacy of debts owed by Zimbabwe. After the power sharing agreement is implemented, it is likely that the political leadership will look forward to a massive injection of external resources into the country to reboot the economy, given the prevailing humanitarian and economic crisis," said ZIMCODD.
The 2009 national budget comes against the backdrop of a worsening economic crisis that has ignited a mass exodus of human capital into the region and overseas.
Be the first to Write a Comment!
Copyright © 2008 Financial Gazette. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
