Treasury cracks down on budget overruns

The Treasury has moved to clamp down on unplanned spending across ministries, departments, and agencies (MDAs) following persistent budget overruns and opaque expenditure that have forced the government into increased borrowing, raising alarm over fiscal sustainability and public service delivery.

In a circular, Finance, Economic Development and Investment Promotion permanent secretary George Guvamatanga directed all MDAs to strictly operate within approved budgets and align strategic plans with measurable outputs and outcomes.

"Treasury has noted with concern continued accumulation of arrears emanating from non-prioritisation and commitment beyond budget provisions. This scenario constrains service delivery by contractors and tarnishes the image of the Government," Guvamatanga said.

He stressed that the fiscal policy thrust for 2026 would prioritise consolidating ongoing projects and programmes, while promoting efficiency in the allocation of limited resources. Strategic plans, he said, must align with the National Development Strategy 1 and 2, with zero tolerance for unbudgeted expenditure.

"These agreed interventions once solidified in the budget will be religiously supported, and there will be no room to crowd them out with unbudgeted expenditures. This is expected to enhance budget credibility," he added.

As part of the new framework, MDAs must now cost their strategic plans annually from 2026 to 2030, with the figures forming the basis of senior officers' performance contracts.

The Treasury also flagged inefficiencies in personnel management, citing an expanding civil service in non-critical sectors despite a recruitment freeze and the persistence of ghost workers. Guvamatanga ordered MDAs to streamline staffing structures to remain within the wage bill threshold of 50% of projected annual revenues.

Recruitment will remain frozen in 2026, except for limited hiring in health, education, and security.

Treasury is further tightening oversight on MDAs' responsiveness to Parliament's Public Accounts Committee, the Auditor General, and internal audit findings, after repeated lapses in resource management. All recommendations from oversight bodies must now be implemented within a year.

The circular also warned against overcontracting, which has frequently left service providers unpaid. From now on, procurement processes will be closely monitored, while all MDAs, local authorities, and state-owned enterprises will be required to integrate annual borrowing plans into the Government Consolidated Annual Borrowing Plan.

In addition, monitoring and evaluation frameworks will become mandatory for all projects and programmes starting in 2026. These frameworks must specify performance indicators to track inputs, outputs, and outcomes.