Finance and Investment Promotion Minister, Mthuli Ncube,Thursday once again was forced to cut bids submitted by government departments by 62% as the estimated US$8 billion budget targeted welfare-related ministries.
Premised under the theme: 'Building Resilience for Sustained Economic Transformation', Ncube said the budget seeks to respond to the challenges and opportunities by laying a solid foundation for future sustained and inclusive growth and development.
The Treasury boss told the August House that the blueprint was coined with guidance from President Emmerson Mnangagwa's vision for countries in SADC to modernise and industrialise their economies through research, innovation and new technologies.
He said during the 2025 National Budget formulation stage, ministries, departments and agencies (MDAs) submitted total bids of over ZiG$700 billion, against the available budget envelope of ZiG276.4 billion, which was more than double the ceiling of revenue collection capacity of 19.6% of GDP.
Effectively, government departments will be short of the duly required resources to fully implement their prioritized projects in the year ahead.
In a major climb down, the National Budget blueprint allocated fewer resources to security related ministries in a development which saw the Office of the President and Cabinet (OPC) receiving US$293,2 million, Defence US$500,9 million, Home Affairs and Cultural Heritage US$449 million.
In comparison, the welfare-related ministries like the Health and Child Care Ministry received US$785,9 million, Primary and Secondary Education US$1 294,1 million, Higher and Tertiary Education US$286,5 million and the Public Service US$297,2 million.
Ncube also confirmed that a huge chunk of his budget will be funded by taxes in the coming year.
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"In line with the projected GDP growth of 6%, during 2025, revenue collections are estimated at ZiG270.3 billion (19.6% of GDP), comprising ZiG218.2 billion tax revenues and ZiG52.1 billion non-tax revenues. This takes into account the existing tax policy regime, supported by enhanced revenue administration measures to reduce leakages, as well as additional measures aimed at widening the tax base," he said.
The Treasury chief implored recipients of the budget to exercise discipline in the wake of the government's priority to service the country's debt.
To mitigate the risks of inflation, Ncube said government will continue to promote the diversification of the economy into sectors such as technology, manufacturing, and services, thereby reducing the dependency on commodity exports and enhancing overall economic resilience.
Very little was done to spur industry in terms of taxation as Ncube moved to scrap duty rebates on buses importations.
He, however, extended relief on import of inputs into the production of motor vehicles.
"The motor vehicle assembly sub-sector has been identified as a quick-win value chain, mindful of the potential to transform 199 Completely Knocked down (CKD) kits and SKDs to CBUs on the local market.
"In line with NDS1 priorities, the Government will prioritize local production of motor vehicles, which will go a long way in creating the necessary value chains, creating jobs, as well as reducing the importation of finished products," he said.
