Treasury outlines 2023 fiscal policy thrust

THE Treasury has outlined key principles guiding the crafting of the 2023 National Budget statement in line with diverse stakeholder policy input gathered during the recent nationwide public consultative meetings.

Zimbabwe has managed to maintain macro-economic stability so far this year amid turbulent domestic and external headwinds, and is now expected to close the year with revised Gross Domestic Growth (GDP) of 4,6 percent from the initial 5,5 percent.

Finance and Economic Development Minister, Prof Ncube, in a Pre-2023 Budget Briefing outline seen by Business Chronicle says next year’s budget statement will largely focus on “Deepening Economic Transformation”.

He stated that the economy was growing, albeit at a slower rate when compared to 2021, on account of global disturbances and other adverse domestic factors.

“GDP growth for 2022 has been revised downwards from 5,5 percent during the 2022 budget to 4,6 percent during the mid-term review. Further reviews are still ongoing as we undertake these stakeholder consultations with any changes being announced during the budget presentation,” said Prof Ncube.

He said higher growth is expected from mining, accommodation and construction sectors with manufacturing also posting positive strides while the agriculture sector is expected to contract due to erratic rains received in the last season.

To buttress the positive economic growth trajectory, the minister says fiscal consolidation will be continued in 2023 in order to entrench the prevailing macro-economic stability, among other key principles to guide the budget.

These include the need to ensure non- recourse to Central Bank overdraft facilities with Treasury expressing determination to cap fiscal deficit at below three percent of GDP, with strict control on consumptive expenditures in order to provide more resources towards development expenditures such as infrastructure and social services

Prof Ncube said going forward the Government will strengthen the Public Finance Management System in order to address risks to budget sustainability, especially the accumulation of domestic arrears and extra-budgetary expenditures.

This comes at a time when the country’s total Public and Publicly Guaranteed (PPG) debt is estimated at $1,3 trillion for domestic debt and US$13,2 billion for external debt.

USDs

To ease the burden, Prof Ncube said rationalisation of subsidies and ensuring that such expenditures are explicitly budgeted for, quantified and approved through the annual estimates of expenditure, was critical.

“Disbursements by Treasury will be strictly limited to available revenue and within the approved budget, due diligence in Government procurement processes and the value for money concept,” said Prof Ncube.

Consistent with the objectives of the National Development Strategy (NDS1) and the need to create a resilient and complex economy, which can generate decent jobs and higher incomes, the minister says the forthcoming national budget will focus key high-impact priority areas.

These encompass, high economic growth and macro-economic stability, supporting productive value chains, optimising value in the country’s natural resources and development of critical infrastructure, ICTs and the digital economy.

Prof Ncube said unlocking opportunities in the youth, sport, arts and culture sector, women, gender equity and SMEs, devolution and decentralisation, are also part of the priority package.

The priority list also mainstreams human capital development, well-being and innovation, ensuring effective institutional building and governance, as well as image building, engagement and re-engagement with a focus on arears clearance and debt restructuring.

The pre-budget ideals take into account domestic and global economic developments and outlook, 2022 budget performance and projected outlook for next year, as well as domestic resource mobilisation measures.-chronicle.ci.zw