Mid-term 2022 budget review expected end of July

Online Desk |  11 months ago | business

Finance and Economic Development Professor Mthuli Ncube is expected to present the 2022 mid-term fiscal policy statement at the end of next month with the Treasury still assessing the possibility of the need for a supplementary budget.

Economic analysts are on record saying a supplementary budget is inevitable and taking into account the fact inflation has risen to 191,4 percent this month from 131,7 percent, the $927,3 billion budget Prof Ncube presented last November has been eroded.

The analysts contend that the supplementary budget should be twice the 2022 national budget, taking into account that the local currency has depreciated to over $600/US$1 from $220/US$1 at the start of the year, hence the budgeted amount was no longer sufficient.

Addressing journalists during a press conference in Harare on Monday, the Treasury chief said the Government had doubled salaries for civil servants and those in the security sector, the legislature, the judiciary and grant-aided institutions and independent commissions effective July 1 2022. 

The benefits also include the implementation of non-monetary benefits.

Responding to questions from the media as to whether the incentives will not result in the Government coming up with a supplementary budget, Prof Ncube said before coming up with a supplementary budget, the Treasury would rather have assurances on the revenues first.

Meanwhile, the Treasury secretary Mr George Guvamatanga responding to questions from the same occasion said the Government does not have an appetite for foreign currency.

The excessive demand and speculative tendencies in the foreign currency market have resulted in the weakening of the Zimbabwe dollar especially on the parallel market, including malpractices by some contractors who were awarded major Government projects that are turning to the parallel market to convert their local currency payments to hard currency.

Last month, Prof Ncube announced that the Government was now paying contractors for major infrastructure projects half in US dollars and half in Zimbabwe dollars.

Under this model, local currency payments to the contractors have been staggered to avert the temptation to try and convert a solid local currency payment on the black market.