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RECHARGE

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Zim govt both restrained and carefree in its spending. Civil servants get short end of the stick.

We expect the National Budget for 2022 to be released soon. As expected, there was a pre-budget seminar where we found out how we did with the 2021 one. Parliament also got to interact with the Ministry of Finance on the upcoming one. There were some interesting revelations from the seminar, especially as regards payments, expenses and disbursements.

As we know, budget evaluation involves comparing what was budgeted for and what actually transpired. Any significant differences warrant investigation. Spending more than budgeted is obviously a problem if no compelling reasons are given.

On the other hand, spending way less than budgeted for signals flawed budgeting or other more worrying problems. However, in the context of an inefficient govt, this is what we would like to see.

Govt spending over budget

So far in 2021, the govt has spent a little more than what was budgeted for. In other news, water is wet. It is never a surprise when a govt fails to spend within its limits. 

From January to September 2021 the govt spent ZWL$350.2 billion against a target of $305.32 billion. Over budget by $44.9 billion, which is an overshoot of 14.7%. 

The Auditor General looked at the activities of the Treasury and found that there was unauthorised expenditure amounting to ZWL$6.8 billion. A supplementary budget of that amount should have been approved by the parliament. The speaker of parliament was not amused. 

I, therefore, urge the Minister of Finance and Economic Development to promptly engage Parliament and regularise this unacceptable fiscal anomaly. I further demand strict adherence to the dictates of the Constitution, the Finance Act, the Appropriation Act, the Public Finance Management Act and any other legislation that attempt [sic] to ensure value for money in the budgetary processes of our country.

What exactly did we spend the $350.2 billion on? 

Capital expenditure

36% went towards capital expenditures. You have no doubt seen some of the infrastructure projects the govt is undertaking, notably road rehabilitation, and $126.7 billion went towards that. 

It is this expenditure that is chiefly responsible for the depreciating Zimbabwe dollar as economists have pointed out. The beneficiaries of these funds are the same ones dumping the Zimdollars on the black market. We have discussed this before here.

Civil servants compensation

32% ($111.6 billion) went towards salaries and other compensations. There was a time when most of the government’s expenditure went towards salaries. It was unsustainable to have the wage bill exceed 90% of the govt’s revenue in 2019. Then came the ‘Austerity for Prosperity’ drive and we saw the reduction in the wage bill. In the first 9 months of 2021, the wage bill was 35% of the revenue collected.

While we appreciate that the wage bill has been reined in, it’s hard to celebrate that as a victory. In an ideal world we wanted the bill to be reduced mostly by removing the ghost workers that were (are?) on the payroll. And also for revenues to be increased so that there was more left over after paying salaries. 

However, what we got was just a freezing of civil servants’ salaries as inflation rocked the economy. Thus we find civil servants in effect got massive pay cuts through inflation. A teacher is earning about US$200 a month, which simply is not enough. When we consider that the US$200 is actually an increase from 2019 and 2020 we see that there really is no reason to celebrate the wage bill decrease.

A restrained govt?

What’s commendable is that the Treasury under Mthuli Ncube’s leadership is restrained in its spending. Yes, I know, we have just talked about spending over budget but hear me out. We have posted some budget surpluses in the last few years and it’s not all down to shortchanging civil servants.

Turns out only 38% of the budget allocated to parliament had been disbursed by the Treasury. Do note that at 75% of the year, only 38% of the funds had been released. If we are underpaying our teachers, it’s at least good to see we are not splurging on our MPs. The speaker of parliament was livid because of this though,

I, therefore, demand that the Minister of Finance and Economic Development to expeditiously implement the CSRO resolutions for the timeous quarterly release of funds to Parliament.

He makes the argument that an underfunded parliament is less effective and also is susceptible to losing its independence. You make of that what you will but I’m all for less funds allocated and disbursed to parliament. I believe that our MPs owe a duty to the nation and are able to finance their own activities in these difficult times for the nation. But what do I know?

It wasn’t just parliament that didn’t get its allocated funds. In the half year ending June 2021, we actually had a budget surplus of ZWL$570m. Most ministries had received far less than 50% of their budgeted funds at the half year mark.

Of course, the argument is that the ministries cannot possibly be effective when they are underfunded. On the other hand, they were hardly effective even when they were fully funded so we might as well starve them.

In closing

I know talk of national budgets is not the most exciting of subjects. However, this actually has a huge impact on the economy and so on our day to day lives as well of the companies we love in the technology industry.

In the next article in this series we will be zeroing in on the information community technology and courier services budgets and funds disbursements. The govt always seems to pay lip service to ICT. They acknowledge that it “plays an important role in the development of a nation and forms the backbone of industry in developing economies.” Talking about the Vision 2030 they said,

Given the increasing importance of the electronics, telecommunications and information communication technology (ICT) industry, the country therefore needs to strengthen its technological base in these areas in order to meet demands of the 21st century.

We will examine if they indeed put their (our) money where their mouth(s) are.


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15 thoughts on “Zim govt both restrained and carefree in its spending. Civil servants get short end of the stick.

  1. Good article, bro. When one tunes in on the telly and watches our parliament in session, you get smacked in the face by the levels of incompetence the majority of those MPs show. Not knowing much what goes on in the shadows but those guyz really need to step up on all levels of professionalism. The culmination of incompetence.
    It would be careless to give those guys more money

  2. As regards civil servants they have already found a way out of their calamity 🤪🤪🤪teachers do extra lessons,police are famous for being the bribe masters,those in the prison service also are famous for accepting brides,the army folks have resolved to armed robberies and looting from makorokoza 🤪🤪🤪 A corrupt government always breed corrupt civil servants, it is the mass that you should be wary of because they are the ones that are truly being short changed…..

  3. We should stage a revolution with the solders on our side..Restart the state formation process.Reallocate land, mines, push for private ownership of rural land..Whos with me.

    1. Just give me a sniper rifle and i will sort everything out😎i know who needs to go, ndovaendesa vese havo
      PS. I have lots of experience.i have seen every action movie from sniper1-5, john wick1-3,taken1-3, equalizer 1 n2,die hard and so many more ndoshudha munhu🤭🤭😂

  4. But if you kindly notice, we are in a political trap. Z:)NU is extremly corrupt , @ the same time MDC is a political mess.This are all effects of Mugabe’s long reign, The showers of corruption spashed to both sides of the room and even made their way to the bare civil core of the country.This problem isn’t going away any time soon..Unless maybe the pple do something (serious)

    1. That is where the catch is bro, the have deliberately created a system that keeps the povho in fear hence any revolting is kept to minimum…been studying the North Korean revolution ,the general Kim Il Sung went to war at the age of 13 and 20yrs latter he came back triumphant 🤗🤗🤗 The povho need revolutionary leaders not what we have in these opposition “Zanu Pf clowns” 🤪🤪🤪 My philosophy is that the Zimbabwean problem can only be solved by its people …..

      1. When you own a store & making a profit of US$50 000 per month and you truly want to change things in your country you talk to every customer u have to pay US$5 or Z$500 upfront per month, when you have at least
        10 000 customers you should be able to make
        US$50 000 per month.Now it will be easy to drop the price down, if bread was Z$150 you will notice that the owner of the store will be forced to lower the prices it is possible to revert to
        US$1 is to Z$1 (RATE) trust me it is working.

      2. When you own a store & making a profit of US$50 000 per month and you truly want to change things in your country you talk to every customer u have to pay US$5 or Z$500 upfront per month, when you have at least
        10 000 customers you should be able to make
        US$50 000 per month.Now it will be easy to drop the price down, if bread was Z$150 you will notice that the owner of the store will be forced to lower the prices it is possible to revert to
        US$1 is to Z$1 (RATE) trust me it is working..

    1. When you own a store & making a profit of US$50 000 per month and you truly want to change things in your country you talk to every customer u have to pay US$5 or Z$500 upfront per month, when you have at least
      10 000 customers you should be able to make
      US$50 000 per month.Now it will be easy to drop the prices down, if bread was Z$150 you will notice that the owner of the store will be forced to lower the prices it is possible to revert to
      US$1 is to Z$1 (RATE) trust me it is working.

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