Mthuli Ncube moots ZWL$3.4 trillion 2023 budget

August 4, 2022

BUSINESS REPORTER

 

Finance and Economic Development minister Mthuli Ncube will table a ZWL$3.4 trillion budget for next year with nearly half of the revenue going towards employment costs and pension, a budget strategy paper shows.

The budget will be nearly double the ZWL$ 1.9 trillion expenditure for 2021.

According to the Budget Strategy Paper, expenditure as a percentage of GDP will be at 18.1%.

Annual inflation is projected at 100.7% next year.

It is projected to end this year at 166.7%. Annual inflation for July raced to 256.9% from 191.7% in June fuelled by the depreciation of the local currency on the parallel market.

Ncube said measures towards rationalisation of public expenditures will be deepened by identifying and removing expenditure overlaps and waste, strengthening programme-based budgeting, anchored on performance contracting of public officials and other public finance management reforms, domestic resource mobilisation and facilitating private sector led growth to attain the targets.

He said structure of government spending will continue to be reviewed and employment costs including pension limited to below 50% of revenues while capital spending as a percentage of GDP gradually increased to support the high economic growth strategy under NDS1

Ncube said revenue collections will be enhanced through rationalisation of tax expenditures incurred as a result of generous fiscal concessions. Initiatives have already been taken through adoption of a duty regime which strengthens Value Added Tax collections.

Ncube said the deliberate policy whereby industry access duty free inputs and capital equipment is anticipated to boost production, enhance disposable income thereby widening the tax base.

He said the government is modernising tax systems, broadening the tax bases as well as introducing more efficient ways of raising revenue from existing revenue measures as well as those targeted at the informal sector.

The 2023 National Budget will have a budget deficit of about ZWL$260bn to be financed through borrowing in the domestic financial and capital markets, given the limited access to external financing due to the external debt arrears, Ncube said.

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