Harare — GOVERNMENT will require US$200 million to hold elections next year if principals to the inclusive Government stick to the provisions of the Global Political Agreement, which gave the coalition a two-year tenure.

Finance Minister Tendai Biti yesterday told journalists that Government needs US$100 million for presidential elections and an equal amount for parliamentary polls.

He said this at a Press briefing to announce the early commencement of stakeholder consultative processes ahead of the 2010-2011 National Budget Statement set for November.

President Mugabe, Prime Minister Morgan Tsvangirai, Mavambo/Kusile/Dawn's Simba Makoni, who was roped in by the MDC, and independent candidate Langton Towungana contested the presidential election in the March 2008 harmonised polls.

The first round did not produce an outright winner, but Presi-dent Mugabe won the subsequent run-off.

The parties -- Zanu-PF, MDC-T and MDC -- however, reached an agreement in September 2008 to form an inclusive Govern-ment under the facilitation of former South African president Cde Thabo Mbeki.

Minister Biti indicated that it was still unclear whether the elections would be conducted next year when the GPA expires.

He, however, said it was critical to have a medium-term perspective and provision for such a possibility.

"US$100 million would be required for elections if (presidential) elections are to be held next year and that means US$200 million would be required for two elections (including parliamentary polls)," he said.

On the certainty of the polls, Minister Biti said that was for the principals to decide, adding that his ministry would start preparing and making provisions for the plebiscite.

However, President Mugabe has said elections would be conducted after the expiry of the GPA provision while the MDC formations have said the elections should be held when a new constitution is in place.

Minister Biti said Treasury would have to contend with the issue of budgeting for possible early elections among a host of other challenges that include lack of a strong revenue base, little foreign direct investment and aid.

He said in the face of tight fiscal space, the Government was envisaging another US$2 billion National Budget as opposed to its expectations of US$4 billion next year.

Government is collecting US$140 million a month and needs revenue of US$400 million a month to grow the economy to the 1999 peak of US$9 billion.

He said Treasury will maintain a cash budgeting policy in the face of financial constraints as Government struggles to get meaningful inflows under its US$810 million Vote of Credit facility.

The facility has, however, raised the spectre of an 11 percent budget deficit.

Minister Biti said the focus of the budget would be to refine and define the refocusing, regeneration and rebuilding of the economy within the context of all factors required to achieve a developmental state.

The budget also seeks to consolidate progress made last year in stabilising the economy and graduating it to a growth mode by raising industrial capacity utilisation from the current averages of 45 percent to 85 percent.

Treasury has commenced an all-inclusive consultative process

for the 2011 National Budget to avoid the backlash similar to what it received this year in Parliament when the Mid-Term Fiscal Policy Review was presented.

Minister Biti said the consultative process for the next national budget would include Parliament, the public, Government ministries and departments, business, civil society and the diplomatic communities.

In this regard, he would distribute budget co-circulars to ministries, accounting officers and heads of departments to start consultations with their various constituencies before submitting their budget proposals.

The Ministry of Finance, the Cabinet Committee on Budget and Cabinet itself would subject the budget proposals by line ministries to scrutiny before they are passed for inclusion in the budget.

"We consider that there are three things that are fundamental to a budget. The first one . . . it must be credible, that there must be a link between the people's aspirations and what that budget propounds.

"There must be a link between corresponding and attendant resource allocation within that budget," he said.

Minister Biti said the budget would be anchored in a forward looking plan with a medium-term perspective.

Thirdly, the 2011 budget would take cognisance of the need to recognise constraints and the fiscal statement would be a tool of managing resources considering the limited revenue inflows.

Efficient financial resource management would therefore be implemented in the framework and dictates of the Public Finance Management Act, which was gazetted into law early this year and requires the budget to be presented by November, he said.