“Against a background of a structural imbalance in the composition of budget expenditure, wherein the wage bill accounts for a disproportionate share, re-balancing of expenditures is critical,” Ncube said. He announced the following measures to contain spending:
Cut senior civil servants’ remuneration by 5% Calculate annual bonus using only basic pay, instead of including housing and transport allowances Close eight of its foreign-service missions Terminate the employment of thousands of so-called youth officersThe steps will help the government contain expenditure in 2019, which is forecast at $8.16 billion, unchanged from this year, Ncube said. Revenue is forecast to grow 25 percent to a projected $6 billion, reducing the deficit by more than half to 5 percent of gross domestic product, from 11.7 percent, he said.
$ billion 2017 (Est.) 2018 2019 2020 2021 Total revenue 3.87 5.30 6.60 7.49 8.56 Total spending 6.39 8.16 8.16 8.98 9.82 Budget deficit (%) 11.7 11.7 5 4.1 2.9 Total financing 2.41 6.12 6.47 2.68 2.02 GDP 4.7 4 3.1 7.5 7.7 Inflation (% at end period) -3.4 25.9 5 5.5 5.8Ncube also cut the Treasury’s growth forecast for this year, citing a foreign-exchange shortage that’s curbed mining and manufacturing output.
Growth this year is expected to be 4 percent, compared with a forecast of 6.3 percent he announced last month.
“During the last half of the year, there was a noticeable growth slowdown associated with foreign-currency supply and allocation challenges, exchange-rate misalignment, inflationary pressures and rebasing effect,” Ncube said. “The most affected sectors include mining, manufacturing and services.”
(By Desmond Kumbuka and Godfrey Marawanyika)
