Treasury cracks down on budget overruns

LIVINGSTONE MARUFU

Treasury has moved to halt unplanned spending across ministries, departments, and agencies (MDAs) after repeated budget overruns and opaque expenditure forced the government to increase borrowing, raising concerns about fiscal sustainability and public service delivery.

In a circular, seen by Business Times, a market leader in business, financial and economic reportage, Finance, Economic Development and Investment Promotion permanent secretary George Guvamatanga instructed MDAs to strictly adhere to approved budgets and align strategic plans with measurable outputs and outcomes.

“Treasury has noted with concern continued accumulation of arrears emanating from non-prioritisation and commitment beyond budget provisions. This scenario constrains service delivery by contractors and tarnishes the image of the Government and thereby compromise public service delivery, Guvamatanga stated.

He added: The fiscal policy thrust for 2026 requires MDAs to consolidate on-going projects and programmes considering the projected budgetary constraints and ensuring efficiency and effective allocation of available resources.

Guvamatanga stressed that strategic plans must align with the National Development Strategy [NDS]1 and NDS2 targets, with zero tolerance for unbudgeted spending: These agreed interventions once solidified in the budget will be religiously supported and there will be no room to crowd them out with unbudgeted expenditures. This is expected to enhance the budget credibility.

MDAs are now required to cost their strategic plans annually from 2026 to 2030, with these figures forming the basis for senior officers’ performance contracts.

The permanent secretary also flagged inefficiencies in personnel management, noting an expanding civil service in non-critical sectors despite a recruitment freeze and the ongoing burden of ghost workers.

“As part of the strategic planning process, MDAs are required to conduct a thorough review and align their personnel structures, skills, and competencies,” Guvanatanga said.

“MDAs are expected to come up with streamlined personnel requirements which can be sustained within the wage bill threshold not exceeding 50% of annual projected revenues.”

For 2026, Guvanatanga said recruitment will remain frozen across all sectors except health, education, and security, where limited hiring will be permitted.

Treasury is also tightening oversight over MDAs’ responsiveness to Parliament’s Public Accounts Committee (PAC), the Auditor General (OAG), and Internal Audit (IA), following repeated findings of poor public resource management: Accordingly, in coming up with strategic plans, MDAs are required to take into account recommendations made by PAC, OAG, and IA which must be implemented within a year.

The circular further highlighted recurring failures to pay service providers due to overcontracting.

” From now on, Treasury is closely monitoring the procurement processes to minimise overcontracting.

“All MDAs, local authorities, and state-owned enterprises planning to borrow must integrate Annual Borrowing Plans into the Government Consolidated Annual Borrowing Plan.

Monitoring and evaluation frameworks will now be mandatory for all projects and programmes in 2026.

In order to strengthen budget execution, MDAs are required to develop monitoring and evaluation frameworks for projects and programmes, which will highlight the performance indicators for the projects in terms of inputs, outputs, and outcome indicators, Guvamatanga said.