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Source: Budget deficits now history | The Herald April 29, 2019 Prof Ncube Golden Sibanda Senior Business Reporter Consolidated statements of financial performance gazetted on Friday have revealed a strong positive variance between income and expenditure, indicating that Government may have found a lasting solution to dealing with budget deficit. The consolidated financial statements show […]
Source: Budget deficits now history | The Herald April 29, 2019
Golden Sibanda Senior Business Reporter
Consolidated statements of financial performance gazetted on Friday have revealed a strong positive variance between income and expenditure, indicating that Government may have found a lasting solution to dealing with budget deficit.
The consolidated financial statements show that in February 2019 there was a surplus of 31 percent, up from the 4 percent recorded in January.
The statements for both months confirm remarks by Finance Minister Mthuli Ncube last week that Government finances were now in a healthier state than over the past few years.
Minister Ncube lamented price increases by businesses, saying it was speculative as Government had stabilised key fundamentals, including overexpenditure, which previously exerted pressure on inflation.
Government has often received flak for reckless expenditure and living beyond its means, which fuelled inflation and the wild run of parallel market foreign exchange rates, in turn driving up prices of basic goods.
The two percent tax on online cash transfers has been a consistent performer in terms of revenue contributions since inception in October last year averaging $100 million over the last two months,.
The Intermediated Money Transfer Tax is part of austerity measures being undertaken by Government which include expanding revenue inflows to support key socio-economic programmes, but the new thrust entails doing this within budgeted Government finances to avoid destabilising budget overruns.
The gazetted figures showed that total revenue for January 2019 came in at $487 million against a budget of $467 million, resulting in a positive variance of $20,6 million, while expenditure totalled $385 million against a budget of $483 million.
Given revenue inflows of $487 million and total expenditure of $385 million, Treasury managed to record a surplus of $102 million, confirming what Minister Mthuli said last week at the Zimbabwe International Trade Fair (ZITF) in Bulawayo.
Minister Ncube said Government was solvent and doing very well on the fiscal front, which has seen it running surpluses that have averaged $100 million since September last year when he came in.
“Major contributors to this positive variance were non-tax revenue, which contributed $19,3 million against budget of $11,5 million and other taxes, which contributed $120,6 million against a budget of $81,1 million, resulting in a positive variance of $39,4 million,” reads the gazetted financial statements.
According to the financial statements, the Government spent $379 million on recurrent expenditures against a budget target of $437,9 million, giving a positive variance of $98,2 million or 20 percent.
Employment costs gobbled a total of $279,6 million compared to a budget of $279,2 million, giving a negative variance of just $383 000 over the 31 days.
Current transfers totaled $54,9 million against a budget of $75,3 million, resulting in a 27 percent variance or $20,4 million in dollar terms.
In January 2019, the consolidated financial accounts show that the Government spent an insignificant amount of funds on capital programmes than it had planned for the period under review.
The encouraging public financial performances by Government extended to February, which saw State revenues totalling $606 million against targeted expenditure for the period of $426 million.
The financial outturn gave a positive variance of $143 million and mjor contributors were non-tax income at $141 million (budget $113 million) and tax on goods, which raked in $336 million (budget $256 million).
Expenditure in February amounted to $521 million against target of 505,7 million, resulting in a negative variance of 3 percent, as Treasury kept the pursestrings tight.
Employment costs during this period, which consume the bulk of Government finances, gobbled $233,4 million against a budget target of $231 million, reflecting a variance of 2,1 percent.
Expenditure on capital programmes amounted to $7,3 million against target of $47,1 million, representing under-expenditure of $39,8 million for the period.
“Airtime levy for February 2019 contributed $11,7 million against a budget of $10,2 million,” reads the financial statements. “This levy is ring-fenced for medical equipment and drugs. Its utilisation is contracted by the need to provide foreign currency for drugs.”
In January, the airtime levy raised $13,7 million against a target of $9,1 million.
While the Government has managed to increase revenue inflows, often beating its revenue targets, it has maintained a tight leash on expenditures to rein in money supply blamed for fuelling inflation.
Source: BRI opens new doors for Zim | The Herald April 29, 2019 Mr Zhao Baogang Kuda Bwititi Chief Reporter China’s signature foreign policy programme, the Belt and Road Initiative (BRI), has opened fresh opportunities for Harare to elevate its relationship with Beijing and also unlock fresh funding for economic projects, a top Chinese official […]
Source: BRI opens new doors for Zim | The Herald April 29, 2019
Kuda Bwititi Chief Reporter
China’s signature foreign policy programme, the Belt and Road Initiative (BRI), has opened fresh opportunities for Harare to elevate its relationship with Beijing and also unlock fresh funding for economic projects, a top Chinese official has said.
The second BRI summit ended at the weekend, unlocking multibillion-dollar deals for countries which China has partnered under the initiative.
About 40 heads of state from around the world, including Russia’s Vladimir Putin, attended the summit which sought to elevate China’s connectivity with the rest of the world.
Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa headed Zimbabwe’s delegation at the summit.
In an interview, China’s deputy ambassador to Zimbabwe, Mr Zhao Baogang, said Harare is poised for massive benefits from BRI.
Mr Zhao said financial cooperation between the two countries is expected to go north.
“We want to emphasise that China will continue to provide more loans and more grants to Zimbabwe. But what is important to note is that even greater financial cooperation can be achieved through the investment that the ambassador has emphasised.
“There is no limit to the amount of investment that can come to Zimbabwe from China. We urge your Government to do more to attract Chinese investors through the ease of doing business.”
Mr Zhao the said the ball was in Zimbabwe’s court to receive capital from China, as the Oriental state plans to invest $750 billion in the next 10 years under BRI projects.
“It is really up to Zimbabwe’s Government and business to see what projects they come up with to get a bigger share of the $750 billion than other countries.
“Since BRI was launched 300 000 jobs have been created on the Old Silk Road route.”
The Silk Road was an ancient network of trade routes that connected the East and West.
Mr Zhao said in line with the thrust to upgrade relations, a high-powered Government delegation headed by Minister of Foreign Affairs and International Trade will visit Beijing in the next few weeks.
“The Ministry of Foreign Affairs in China has invited your Minister of Foreign Affairs to discuss these issues. We believe that such dialogue gives the platform for us to understand each other and understanding each other is the foundation for greater cooperation.”
Mr Zhao said there is great scope to increase trade between the two countries, as the world’s second largest economy provides a huge market opportunity for Zimbabwe to sell its products, particularly agricultural produce.
He said in the next decade, China’s commodities market will be worth a whopping $24 trillion.
“This year in June, the Zimbabwe delegation will be invited to China for a high-level exhibition in the city of Chan-Sha.
“This will be yet another chance for Zimbabwe to showcase its products. There is a huge market for agriculture produce, in particular citrus products.
“In fact, it is estimated that in the next 10 to 15 years, China will import US$24 trillion of goods from around the world. China has a huge market through its 1,4 billion people.
“We want your Ministry of Agriculture to work with our embassy to take up these opportunities which can be very lucrative for Zimbabwe.”
Mr Zhao said under the BRI’s infrastructure cluster China wants to assist Zimbabwe in the construction of railways and roads.
He said under people-to-people exchanges more than 1 000 Zimbabweans will travel to China for educational scholarships and training programmes.
There is also going to be an enhancement in cultural exchanges between peoples from the two countries.
In her remarks in one of the meetings at the summit, Minister Mutsvangwa said BRI “could not have come at a more propitious time for Zimbabwe” as it feeds into Vision 2030.
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