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Chinamasa unveils $4 billion budget with a deficit

by Staff reporter
26 Nov 2015 at 15:03hrs | Views
Finance and Economic Development Minister, Patrick Chinamasa, has presented a $4 billion budget at Parliament Building this afternoon, with emphasis on the need to maximise revenue collections, plug border leakages and funding key economic sectors such as agriculture, mining and tourism.

In 2016, GDP growth is projected to rebound to 2.7%, mainly on account of mining, tourism, construction and the financial sector.

Agriculture is expected to recover by 1.8%.

The minister said the economy is tied on the performance of these key sectors, hence the unveiling of inputs to cotton farmers for the next three seasons to encourage production.

He said responsible ministries will soon announce incentives to dairy, mining and manufacturing sectors.

On mining, Chinamasa said government is committed to the consolidation of diamond mining firms, and projected gold production at 24 tonnes in 2016, compared to 13,7 and around 18 tonnes in 2014 and 2015 respectively.

The Minister also announced that $2,1 million has been set aside for investments in gas mining projects to be carried out in Matabeleland North province.

Chinamasa said the successful resolution of Zimbabwe's external debt payment plan is expected to disseminate positive signals to investors and lenders, adding that the perceived country risk premium that has made credit lines to Zimbabwe unaffordable should be reduced significantly.

16: 38 - Minister ends budget presentation.

16:16 - Minimum capital requirements for insurance increased, short term insurers for core capital to increase to $2,5 million from 1,5 million by December 2016.

16:08 - Infrastructure bond on state schools and universities to be floated.

16:06 - Govt to fund parastatals audit.

$2 million for performance audits in the Auditor General's office…reform account unit to be established to monitor public entities and analyse financial statements.

16:03 - Efforts to mobilise $1,9 billion for railway is still underway.

16:02 - Govt committed to revive ZISCO Steel but all employees' contracts to be terminated on 3 months notice, before a new investor comes on board.

15:34 - Minister proposes a Budget of $4 billion in 2016, with the projected financing gap of $150 million funded largely through borrowing on the domestic market.

Money earmarked for recurrent expenditure is $3.685 billion, while $315 million is proposed for the development Budget.

Projected employment costs are at $3.191 billion and proposes to allocate $384 million towards operations.

15:36 - $2,1 million to be invested in gas mines in Matabeleland North province.

15:34 - Gold production projected at 24 tonnes in 2016, compared to 13,7 and around 18 tonnes in 2014 and 2015 respectively.

15:31 - Minister pledges incentives to dairy, mining and manufacturing sectors.

15:30 - Minister acknowledges the importance of the cotton industry and pledges that government will give cotton farmers inputs for the next 3 years to encourage them to continue production.

15:28 Prices set for further deflation in 2016, with forecast of 1.6% by end of the year, giving an estimated nominal GDP at market prices of $14.2 billion.

15:17 - Exports projected at $3.4 billion, against imports of $6.3 billion, giving a trade deficit of $2.9 billion.

15:09 - Subdued exports in 2015 will culminate in a trade deficit of $2.9 billion, against $2.7 billion in 2014. He bemoans the country's over-reliance on foreign goods, such as grain, foodstuffs, chemicals and pharmaceutical products, among others, most of which can be produced locally.

15:07 - Chinamasa says the successful resolution of Zimbabwe's external payment arrears is expected to disseminate positive signals to investors and lenders. In this regard, he says the perceived country risk premium that has made credit lines to Zimbabwe unaffordable should be reduced significantly.

In 2016, GDP growth is projected to rebound to 2.7%, mainly on account of mining, tourism, construction and the financial sector. Agriculture is expected to recover by 1.8%.

14:48 - Min Chinamasa is now presenting the budget and says it is an abridged version of the 2016 budget. He thanks Zimbabweans for all pre-budget contributions that helped the fiscal authorities in drafting the budget.

Source - zbc

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