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Biti as he shreds Mthuli Ncube's supplementary budget

by Staff reporter
21 Aug 2022 at 08:50hrs | Views
"We have been there before, in 2006, 2007 and 2008, once you begin to budget in trillions, you must know you have lost it. You must know that you have now become an innocent by-stander to the economy.

"You must know that you are no longer in charge of the economy. Unfortunately, that is the predicament that my good friend, the Minister of Finance finds himself in."

This was said by former finance minister and opposition Harare East legislator Tendai Biti in Parliament last week as MPs debated a Committee report on the supplementary budget presented to the House by Finance Minister Professor Mthuli Ncube at the end of last month.

Presented as part of the Minister's mid-term fiscal review, the supplementary budget requested additional spending of ZW$929.3 billion on top of the initial 2022 approved budget of ZW$968.3 billion, consequently increasing the proposed 2022 budget ZW$1.9 trillion.

Biti, who is the opposition Citizens Coalition for Change (CCC) parliamentary spokesman on the economy said there was nothing supplementary about the Minister's new spending requests.

"A supplementary budget is an increase, 10%; 15% – you can call it a supplementary budget," he said.

" … but when you have a 100% increase on the original budget, it cannot be a supplementary budget. This is a brand new budget; a budget that is now raising expenditure by 100% to $1.9 trillion."

Biti said the development raised questions about the credibility and legitimacy of the budget process as assumptions which informed the initial 2022 budget which was presented in November 2021 had turned out to have been 100% off the mark.

"The concern is that the underlying assumptions made by the Minister were so far off the mark that hardly more than six months later, he has had to come to this august House to ask for a 100% increase in his budget," he said.

"So we question the legitimacy and credibility of all the processes that we are doing.  It is a waste of time that we are asked to sit here when the Minister is going to go and be off target by 100%.

"This is the Minister who has cut his teeth on the mantra of surpluses.  So what it means is that before six months is out, this budget is already out by 100%."

He challenged the Minister and government to respect Parliament, noting there was now a worrying perennial trend whereby the government would overspend and then come to the legislator to seek condonation.

"Bear in mind that we already have a Financial Adjustment Bill tabled in February, 2022 in respect of which the Minister is asking for condonation by this august House of over expenditure in 2019 and 2020 of $103 billion," said Biti.

"If you look at $103 billion for 2021 and for 2020, it actually means that he has been having a parallel budget that is more than the original budget. The only thing that he has done in his favour this time around is, at least he has come to Parliament to ask for condonation.

"Otherwise in the last years – 2018, 2019, 2020 and 2021, he has just been running parallel budgets and then seeking post condonation by Parliament through the Financial Adjustment Bill.

He added; "Our prayer now is that the Minister must respect Parliament. The Minister must respect the Blue Book; the Minister must respect the Appropriation Bill that we pass as Parliament and live within his means, so that Parliament is not put to the embarrassment that it becomes a rubber stamp of excessive Government expenditure engineered by the Minister of Finance."

Biti said the mid-term fiscal review and supplementary budget had failed to address the key challenges crippling the economy, citing these as hyperinflation, a collapsed exchange rate, failing public service system, the huge public debt as well as public debt, arbitrage and corruption.

He warned that the company was on a fast track to the hyper-inflationary mayhem of 2008 when Zimbabweans were turned into trillionaires who could not afford to buy a loaf of bread.

"We go back to 2008, where all of us were trillionaires," said the former finance minister.

"The last time the Reserve Bank Governor printed our own currency, it was a $100.000 trillion, which could not buy you two bottles of soda.

"We now have our highest denominated note being a $100 note which cannot buy you a loaf of bread. That is failure Madam Speaker Ma'am; it cannot buy you chewing gum and that is failure.

"The Government must stop printing money through an expansionary fiscal policy.  The Government must live within its means and eat what it kills.  It cannot kill a rat and spend money like it has killed an elephant. That is the basis of the instability arresting this economy."

Source - NewZimbabwe