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Harare - The Zimbabwean government overran its 2016 national budget by close to US$1b, Finance and Economic Development Minister Patrick Chinamasa has said.
Presenting the inaugural 2016 Annual Budget Review in Parliament on Thursday, Chinamasa said the government's 2016 expenditure amounted to $4.9bn against a budget of $4bn, resulting in a budget overrun of $902m.
"The major driver behind the $902m overrun were interventions in support of recovery of agriculture, which amounted to US$615m," said Chinamasa, adding that treasury had made a provision of only $66m for agricultural support.
Chinamsa said other expenditure overruns were on recapitalisation of public enterprises amounting to US$220m; and compensation of former farmers amounting to US$134m.
The finance minister said financing of the 2016 budget deficit was primarily through domestic borrowing, against the background of absence of external financing.
“In total, the government deficit stood at US$1.4b, against an initial target of US$150m. This was caused by a combination of inescapable expenditure requirements and revenue under-performance of US$347.8m.
Chinamasa however noted that failure to contain the budget deficit and borrowing requirements has serious economic and financial implications, “especially when support to development expenditures to stimulate production is insignificant”.
“Concerned with the rapid growth in the fiscal deficit, Cabinet directed that Government Ministries and Departments immediately adopt expenditure cost-cutting measures which will assist in restoring the fiscal deficit to sustainable levels”, Chinamasa said.
Meanwhile, Chinamasa noted the country's tax revenue performance for the first half of the year was 1.4% ahead of budget estimates. He said the country's revenues are now expected to rebound to $3.7bn.
