The Government has directed that no ministries, departments, and agencies (MDAs) shall contract beyond US$2 million without the Treasury’s written consent to entrench fiscal discipline crucial to the stability and growth of the economy.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, during a post-budget presentation interview on Thursday, blamed delays on payments to some contractors on over-contracting by some MDAs in the construction of key infrastructure like roads and dams.
He added that some contractors tended to overprice as they used to do during the era of currency instability, when they would add between 50 percent and 200 percent on the normal cost in anticipation of inflation.
“But now things are different; to curb these challenges, the Treasury will introduce stricter controls that include matching the budget release to the cash available.
“In addition, no MDA shall contract beyond US$2 million without Treasury’s written consent,” he said.
“We want some order, and it shall be so, and things will improve, and I am optimistic things will improve going forward.”
MDAs have consistently raised concerns in Parliament over delayed and insufficient fund disbursements from the Treasury, saying the issue hurts service delivery and project implementation.
This aligns with the ministry’s “Value for Money Policy,” which is integrated into broader public finance management (PFM) reforms and national development plans.
Key pillars for achieving VFM include a commitment to fiscal discipline, robust PFM systems, a transparent and efficient budget process, and strengthening oversight through acts like the Public Finance Management Act.
These efforts aim to ensure public resources are used effectively, economically, and efficiently to achieve national goals, such as those outlined in Zimbabwe Vision 2030, by which Zimbabwe aims to have achieved its target of an upper-middle-income economy.
The ministry is prioritising strengthening PFM systems to ensure better control and management of public resources, as outlined in the Public Finance Management Act.
The goal is to have sound and solvent financial systems that support economic growth and inclusivity.
In terms of macroeconomic stability and fiscal discipline, a core component of the strategy is maintaining a stable macroeconomic environment and fiscal discipline through implementing policies that promote sustainable economic growth and manage public finances responsibly to avoid imbalances that put pressure on the economy.
The 2026 national budget is focused on stabilising inflation, easing business costs through tax adjustments, strengthening fiscal controls, and leveraging high mineral prices to fund public programmes, all while pursuing the targeted five percent economic growth.-herald
