Cash budgeting crumbles

The Zimbabwe government is understood to have abandoned its cash budgeting system in the run up to polls that were won by ZANU-PF and President Robert Mugabe, as politicians tapped into government resources to bankroll their electoral campaigns.

biti1Figures indicate that both President Robert Mugabe and outgoing Prime Minister Morgan Tsvangirai had overrun their budgets by June, significantly narrowing prospects of fiscal prudence during the current year.
Even outgoing Finance Minister Tendai Biti (pictured) is understood to have overspent, despite his tough “eat what we gather” stance under which government starved key projects as it sought to reign in profligacy under his tight budgetary measures.

Government insiders said the cash budgeting system had been abandoned and the situation was likely to have been worsened by intense campaigning during the month of July.
Although President Mugabe suspended Cabinet meetings to allow Government Ministers to campaign for themselves and their political parties, the Cabinet ministers remained in charge of their portfolios. They could have taken advantage of this to ensure they had the resources to bankroll their campaigns.
Permanent secretaries are the accounting officers for all government ministries and their departments but they are still accountable to the ministers.
“Yes, we still have these ministers running their various portfolios until a new government is formed. They still occupy their offices and are still accountable for the financial affairs of their ministries. The permanent secretaries implement policies and directives from the ministers although they can give advise against transgression,” a senior civil servant said.
Sources said massive budget overruns were likely to be reported for the first week of August.
But they noted that signs of a budget overrun were already evident.

In the past six months, said a source, it had been difficult to stick to cash budgets as government expenditure swelled amid high imports and resurgent prices, with foreign trips by top civil servants and government ministers chewing over 70 percent of the US$41,3 million allocated for travel expenditure in the 2013 National Budget.
The State security system had spent 76 percent of its overall allocation, according to figures.
By the end of June, only US$13 million had been left for foreign travel.
“Many ministries have overrun their fuel allocations for August, and they will soon be eating into the September allocation,” said a government sources.
This, apparently, clearly indicated that much of this could have been used during political campaigns by the politicians.
Zimbabwe is under an inclusive government between the two MDC formations, one led by PM Tsvangirai and the other by outgoing Industry Minister Welshman Ncube, and President Mugabe’s ZANU-PF party.
President Mugabe is now expected to form the next government after winning 61 percent of the votes against PM Tsvangirai in the disputed July 31, 2013 elections. His party secured a two thirds majority in Parliament.
Government statistics indicated that the cash budgeting system had collapsed even before the July 31 polls when several ministries had spent close to 80 percent of their allocation.
Government expenditure during the first half of 2013 shot to US$1,828 billion, against a budget of US$1,762 billion, statistics indicated this week.
PM Tsvangirai’s office had spent 75 percent of its US$12,4 million budget, while the Ministry of Environment and Natural Resources Management, led by Francis Nhema, had spent 77,4 percent of the US$8 million budget.
Government statistics seen by C&M indicate that even Biti had failed to walk the talk.
The Ministry of Finance had chewed 56 percent of its allocation by as early as June 30.

Other high spending ministries included that of Water Resources, Management and Development, which had spent 59 of the budget; the Ministry of Justice and Legal Affairs, 74 percent; Home Affairs, 58 percent; and the Office of the President and Cabinet, which had squandered 56,4 percent of its US$96 million budget.
By June 30, seven percent of government expenditure had been committed to capital expenditure, against a 2013 National budget estimate of 14,6 percent.
Cash budgeting was meant to curtail deficits.

But it was unpractical for government ministers, accustomed to expensive lifestyles at the State’s expense, to suddenly stick to tight controls.
In June, Biti had hinted that the cash budgeting systems had collapsed, citing poll funding commitments.
“It is worth to note that total support of US$104,4 million as at July 18, 2013 towards Constitutional Referendum and preparations for harmonised elections, had the unfortunate consequence of crowding out implementation of other budgeted programmes and projects,” he said.


Powered by WPeMatico

This entry was posted in Business. Bookmark the permalink.

Comments are closed.