Cash woes choke Zimbabwe ministries

A SPECIAL Cabinet meeting on investment and utilisation of public finances is being convened today against the backdrop of yawning gaps between the national budget and actual outturns.

This follows reports that for almost four months now, ministries have gone on zero disbursement from Treasury, except for salaries and running costs.

The development has raised questions on the reality of the budget presented by Finance Minister Tendai Biti for this year.

Deputy Prime Minister Arthur Mutambara yesterday told the House of Assembly that today's special Cabinet meeting will discuss the depressed rev­enue inflows, among other issues.

Instead of disbursing 25 percent of budget allocations to ministries in the first quarter of the year, Prof Mutam­bara said, most Government depart­ments only got 7 percent.

He was responding to a question from Mutasa North legislator Mr David Chimhini (MDC-T) on the status of Government revenues in light of low disbursements to ministries.

Minister Biti acknowledged the poor state of the country's coffers, saying he will announce his mid-term policy review on July 12.

"There is going to be a major revision of the budget of US$4 billion and part of the reason is that our revenue has failed, therefore the figure of US$4 billion will be revised downwards. The main reason we are going to revise it downwards is because of the under­performance of our diamond revenue. We have collected US$30 million when we expected US$240 million," he said.

Minister Biti said the poor agricultural season in which tobacco output is expected to be 130 million kg, instead of the projected 150 million kg, has also contributed to the down­ward revision.

Maize output is also expected to be 900 000 tonnes, from 1,4 million tonnes.

"As a result of shrinkages in agricul­tural output, we are also going to review the GDP figures. For the first five months the economy has been in coma­tose, we have to take drastic actions. There will be austerity. We have to live within our means. We will have to sell silverware and reform our mining sec­tor," Minister Biti said.

Initially, the economy was expected to grow by 9 percent based on mining and agriculture performances.

A source close to the developments said Cabinet would look at the revenue disbursement movement machinery to find out what is happening with special focus on:

    Revenue leakage relating to min­ing amid concerns that there is over-emphasis on diamond revenue (from Chiadzwa) as if that is the only mineral or mining activity in the country.

    The underperformance of the economy due to lack of funding for agriculture amid reports that the anti-land reform lobby had shifted to starving this sector of funding to create self-fulfilling prophecies that the programme was a disaster from the beginning.

Only 4 000 hectares of wheat have been planted against a target of 50 000ha, amid concerns that the import bill for wheat is going to be a nightmare for a depressed fiscus.

"The chickens are coming home to roost for the finance minister.

"The inclusive Government has been thriv­ing on the momentum of the pre-inclusive Government agricultural boom. That momentum has been lost now due to dearth of funding,'' a source said.

President Mugabe is on record decrying the funding of key Government programmes since the beginning of Minister Biti's tenure.

Addressing traditional leaders in Manicaland in June last year, the President slammed Minister Biti for politicising funding for agriculture.

"Murume watakapa basa rezvemari haana ndangariro sedzatinadzo.

"To him and some of his colleagues, agriculture is not an important area because they think that if they finance this sector, they will be strengthening Zanu-PF. They do not want to see the economy prospering," the President said.

Ironically, in his 2011/12 national budget statement, Minister Biti acknowledged that agriculture had contributed 33 percent to GDP.

What is disturbing, the source said, is that donor money is filtering into the system in the direction of ministries run by MDC-T, a case in point being the US$50 million for water develop­ment that was provided by Britain and Germany through the Department for International Development.

"The spectre of a parallel budget has necessitated this meeting," the source said.

The money has been earmarked for Matabeleland North Province and Prime Minister Morgan Tsvangirai will be going to launch the programme in a constituency being eyed by the wife of Water Resources Development Minister Sam Sipepa Nkomo.

Mrs Nkomo is reported to be eyeing Tsholotsho North constituency held by Zanu-PF Politburo member, Professor Jonathan Moyo whom the MDC-T has been trying to oust from Parliament.

Given the fallout in funding ministries, Minister Biti is reportedly mulling what he calls a "priority of priorities" which analysts say is akin to "a budget of a budget" since the national budget itself is a statement of priorities.

"This (priority of priorities) amounts to an admission that the finances of the country are not being handled well," the source said.

Minister Biti has come under fire from various sectors over his handling of the critical finance portfolio, the latest barbs coming from University of Zimbabwe economics professor Tony Hawkins who accused MDC-T of policy incoherence and for crediting itself with turning around the economy.

In an article titled, "MDC slated over economic revival claims," Prof Hawkins pointed out that dollarisation brought an overnight change to the economy.

"There is nothing that the MDC did in that regard to turning around the economy. It was a result of dollarisation. That is where the change came from, not as a result of their implementing any praiseworthy policy. The MDC is pretty much out of its depth," Prof Hawkins said.

The then acting finance minister Patrick Chinamasa introduced dollarisation in a budget presented in January 2009; two weeks before the inclusive Government was sworn in on February 13 that year.

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