Business / Economy
Govt spending declines
15 Dec 2014 at 07:47hrs | Views
Government expenditure declined by a whopping 98% in September, a rare trend for a country with a well known propensity to overspend.
According to the Consolidated Statement of Financial Performance (CSFP) for September 2014, total government expenditure amounted to $320 million against a budgeted figure of $385 million, leaving a variance of $65 million or 98%.
A nalysts attributed the contained expenditure to a shrinking revenue base.
"Government usually spends above its actual budget. The fact that it spent $320 million instead of $385 million is a rarity. The only explanation for it, is a shrinking revenue base and tight liquidity challenges."
Government continued to miss its revenue targets with total income amounting to $329,6 million against a projected or budgeted figure of $384,8m.
As has become a norm, most of the government revenue is being gobbled by employment cost. During the month, recurrent expenditure was $290,6m, compared to a budget of $317,9m. Of the total expenditure, employment costs chewed up $163m compared to a budget $162m, meaning labour costs went up by $403,404.00.
Government's penchant to overspend is showing no signs of relenting despite overwhelming demands for fiscal discipline and introduction of austerity measures.
Total expenditure for May was $278 million against a total income of $275m while its expenditure in June amounted to nearly $371m against an income of about $369m.
As such, government's fiscal indiscipline seems static. Last year, government applied for a supplementary budget of $491m for the year ending December 31 2013.
In his 2015 budget presentation early this month, Finance minister Patrick Chinamasa (pictured) said during the period to October 2014, employment costs amounted to $2,51 billion, accounting for 80% of total expenditures, excluding loan repayments.
He said budget implementation faced expenditure pressures against low revenue collections during the first three quarters of the year.
Chinamasa said estimates to December 2014 indicate an overall expenditure outturn of $3,92 billion, implying a gap of about $200 million from the original 2014 budget.
According to the Consolidated Statement of Financial Performance (CSFP) for September 2014, total government expenditure amounted to $320 million against a budgeted figure of $385 million, leaving a variance of $65 million or 98%.
A nalysts attributed the contained expenditure to a shrinking revenue base.
"Government usually spends above its actual budget. The fact that it spent $320 million instead of $385 million is a rarity. The only explanation for it, is a shrinking revenue base and tight liquidity challenges."
Government continued to miss its revenue targets with total income amounting to $329,6 million against a projected or budgeted figure of $384,8m.
As has become a norm, most of the government revenue is being gobbled by employment cost. During the month, recurrent expenditure was $290,6m, compared to a budget of $317,9m. Of the total expenditure, employment costs chewed up $163m compared to a budget $162m, meaning labour costs went up by $403,404.00.
Government's penchant to overspend is showing no signs of relenting despite overwhelming demands for fiscal discipline and introduction of austerity measures.
Total expenditure for May was $278 million against a total income of $275m while its expenditure in June amounted to nearly $371m against an income of about $369m.
As such, government's fiscal indiscipline seems static. Last year, government applied for a supplementary budget of $491m for the year ending December 31 2013.
In his 2015 budget presentation early this month, Finance minister Patrick Chinamasa (pictured) said during the period to October 2014, employment costs amounted to $2,51 billion, accounting for 80% of total expenditures, excluding loan repayments.
He said budget implementation faced expenditure pressures against low revenue collections during the first three quarters of the year.
Chinamasa said estimates to December 2014 indicate an overall expenditure outturn of $3,92 billion, implying a gap of about $200 million from the original 2014 budget.
Source - Zim Mail
