THE Finance ministry has begun its 2023 pre-budget consultations, with a three-day seminar with legislators in Harare after initial plans to hold the meeting in Victoria Falls fell through because of resistance from MPs who have not been receiving salaries and allowances.
Hotels in Victoria Falls had also demanded payment upfront after Parliament accrued huge unpaid bills which it is failing to settle. As a result, legislators have been denied accommodation at top hotels in Harare while on parliamentary business.
The pre-budget seminar will include analysing the performance of the 2022 budget, while Finance minister Mthuli Ncube also presented the key economic outlook and assumptions.
The consultations, which will run from Friday to Sunday, are also being done to incorporate views of the electorate in crafting the 2023 National Budget. Various government ministries will present reports on the public consultations conducted, and budget priorities from the perspective of special interest groups which have been inadequately covered by previous budgets. People with disabilities and women have over the years been calling for inclusive budget processes and will get a chance to present their views.
“This seminar will review what the relevant select committees have collated from the electorate as to what ought to be the architecture of the 2023 budget. In that regard, the collective views of the electorate must be respected but not wholesomely adopted,” Jacob Mudenda, speaker of the National Assembly, said during the official opening.
In his opening presentation, Finance minister Ncube presented the economic outlook and key assumptions of the 2023 National Budget.
“The 2023 budget will be based on the macroeconomic framework presented in the 2023 Pre-Budget Strategy Paper. This framework has a growth projection of 5% in 2023,” he said.
Ncube said the 5% growth will be underpinned by six key assumptions that include favourable international commodity prices, good rains and stable power supply.
“The key assumptions also include: global economic growth slowdown, tight monetary and fiscal policy, and continued use of the multi-currency. However, uncertainty in the global economy, such as the current geo-political tensions, rising global inflation and softening international commodity prices pose threats to the attainment of this growth target.
“Similarly, climate change in the form of natural hazards such as droughts, floods, cyclones as well as uneven distribution of rainfall present a challenge for the economy to grow,” Ncube said.
Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the economic outlook is strong as “the requisite economic and financial fundamentals for stability are present”. “Past drivers of exchange rate volatility have been correctly identified and dealt with. Price stability is good for national budget and avoidance of supplementary budgets,” Mangudya said in a presentation.
In August this year, Ncube presented before Parliament a supplementary budget that requested additional spending of ZW$929.3 billion, adding on to the initial ZW$968.3 billion, increasing the proposed 2022 budget by ZW$1.9 trillion.
Legislators have been questioning the credibility of the budgeting process, whose assumptions have largely been inaccurate.
Despite that, Ncube said the economy is scheduled for growth. “Consistent with the growth projection of 5% revenue collections are projected at ZW$3.1 trillion in 2023, of which ZW$2.9 trillion would be tax revenue while the remainder will be non-tax revenue.
“The increase is attributed to improved administrative efficiency and repayment of debt owed to Zimbabwe Revenue Authority (Zimra).
“Expenditures are projected at ZW$3.4 trillion of which 44.7% will go towards compensation of employees at ZW$1.5 trillion, while capital expenditure would be allocated 23.7% of the total expenditure, among other expenditures,” Ncube said.