Toll of wages on 2012 national budget a disaster, says Biti

Zimbabwe's FINANCE Minister Tendai Biti says the 2012 national budget will require US$3,5 billion, with salaries for civil servants expected to chew up the bulk of the money.

Minister Biti said the US$3,5 billion budget, to be presented mid-next month, was consistent with this year's projected growth rate of 9,7 percent.

Presenting his Budget Strategy Paper in the House of Assembly yesterday, Minister Biti said the plan would give a guideline on the fiscal framework.

"However, already US$2, 1 billion is going to wages which is more than half of the total budget and it's a disaster," Minister Biti said.

He said the biggest challenge for the 2012 budget would be to fund other projects in the implementation of the Global Political Agreement.

"Whether we like it or not, there will be a referendum next year and whether we like it or not, there will be preparations for elections in 2012.

"We also have commissions that were created by the GPA, which we have hardly funded, of which for them to operate fully we have to monetise them," Minister Biti said.

He said the only problem that the budget was facing was expenditure.

So far, Minister Biti said, US$40 million had already been spent on travel expenses.

"We have spent so much money on useless things. Unfortunately, I cannot control the leadership if they cannot rein in on this travelling," Minister Biti said.

He said his ministry was considering making amendments to the Public Finance Management Bill, to provide for an office at Parliament that would monitor Government expenditure.

He said the growth rate for 2012 would fall to around 7,8 percent from 9,7 percent because of the politics surrounding elections. Minister Biti said the country would earn about US$4,6 billion from exports while imports would chew up about US$5,7 billion.

"On imports, we are spending US$1 billion on motor vehicles especially in the private sector, US$100 million is being spent on potato chips. Therefore in the upcoming budget we will try to make sure when we bring things here, they are real imports.

"Gross Domestic Product is expected to be US$10 billion at expected growth rate of 7,8 percent. (The) Basis for the downward revision is politics because we expect election talk and violence.

"We had to discount not because of the economic sector, but the political sector. It's a shame that other African countries are growing while we are not," he said. The Minister said because of limited fiscal space, he has provided for a Vote of Credit of not less than US$500 million.

He said there were already consultations with some donor countries on how the Vote of Credit would be met.

Minister Biti said the vision for the 2012 national budget was to see the economy growing while at the same time creating jobs.

He said there was need for inclusive growth which would see the elderly, widows and children benefiting from the economic growth.

Minister Biti was non-committal when he was asked if there would be a salary increase for civil servants in the budget.

He said about 67 percent of the budget was already chewed by salaries, adding that consultations would have to be conducted before any salary increment.

Mudzi South MP Eric Navaya had asked the question.

On the discord characterising the implementation of the Indigenisation and Economic Empowerment Act in the inclusive Government, Minister Biti said it was important that Government came up with a common vision on national issues.

He said there was need for co-ordination among ministries which are affected by the implementation of the Act.