CHENGETAI ZVAUYA
Parliament should make it mandatory for Treasury to bring a charter along with the National Budget as legislators move to ensure that Government lives within its means, Speaker of National Assembly Jacob Mudenda has said.
Finance and Economic Development Minister Mthuli Ncube will present the 2019 National Budget on November 22.
Government has failed to cut runaway expenditure, incurring a budget deficit of $1,4 billion in the first half of the year.
Briefing lawmakers at a workshop for lawmakers at pre-budget seminar in Harare Friday, Mudenda said the executive had to be accountable to Parliament in terms of budget spending.
“I am urging Parliament to work towards making it mandatory for Treasury to bring along with the Budget statement, a Charter of Fiscal Responsibilities as is the case in Uganda. This Charter gives benchmarks and presents Government’s strategy for operating a fiscal policy which is consistent with sustainable fiscal balances over the medium term and the maintenance of prudent and sustainable levels of public debt,” he said.
“Parliament must raise a red flag and say to Government you are overspending beyond the budget allocation and this must stop. If Treasury Bills are to be issued, Treasury must also explain to Parliament.”
Mudenda said the Charter also specifies measurable fiscal objectives for the medium term consistent with national, regional and international benchmarks and best practices in national financial budget engineering.
Government has been borrowing heavily from the domestic market to fund runaway expenditure.
Government borrows from the domestic market through the issuance of Treasury Bills. Domestic debt has raced to $9,5 billion as of August from $275,8 million in 2012.
Last month, Ncube said the excessive issuance of short-term debt instruments at high interest rate was crowding out the private sector and “compounds the increase in government recurrent expenditure”.
“Accordingly, government in its management of domestic borrowing is reviewing the use of TBs in support of socio-economic development programmes.”
In the outlook, Ncube said Treasury “will seek to finance government’s vital socio-economic development programmes by use of instruments that crowds in the private sector, including public private partnerships or government guarantees to financial institutions”.
“Such guarantees will only be a contingent liability to government, unlike TBs that have a direct and immediate cash flow implication on government.”
