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Chinamasa unveils $5,1 billion budget with strict austerity

07/12/2017 00:00:00
by Nkosana Dlamini
2018 Budget woos foreign investors

FINANCE Minister Patrick Chinamasa has unveiled a $5,1 billion budget estimate for 2018 he says shall be accompanied by strict austerity, including government job cuts, surrender of loss making entities, downsizing of embassies and a slash on official foreign travels.

He was presenting his 2018 budget proposal statement before parliament on Thursday in which he set aside $132, 2 million for elections next year.

“Mr Speaker Sir, for 2018, I am projecting budget revenues at $5,1 billion comprising $4,3 billion from tax revenue, $237,2 million from non-tax revenue, $456,7 million from retained revenue and $100 million from grants,” he said.

“Mr Speaker Sir, the expenditures are proposed at $5,8 billion inclusive $456,7 million under retention.”

He added: “…The above revenues and expenditures lead to a projected budget deficit of $672, 3 million which is 3,5 percent of GDP in 2018, from $1,7 billion which was 9,4 percent of GDP this year.”

The Treasury boss said government collected $2, 8 billion against a targeted $2,7 billion during the first nine months of the year.

This represented a 2, 6 percent positive from the projected revenue.

On the flip side, government had a budget overrun of $3,33 billion against demand of $3,11 billion resulting in $217,5 million overdraft during the period under review.

Chinamasa said the 2017 budget expenditure was projected to reach $5,6 billion by year end, which would be $1,5 billion more than the $4,1 billion for 2017.

To reverse the slide, Chinamasa said government will, starting January next year, retire all those who would have reached the retirement age of 65 and further cut off a total of 3,739 so-called youth officers from government payroll.

This shall see government slash its wage bill from 86 percent of total revenue to 70 percent.

The Finance Minister also said government shall maintain a recruitment freeze on all non-essential staff to contain a run-away wage bill.

Some of the planned austerity shall see the reduction of benefits to senior government officials among them fuel allocation reductions and a single car for official.

Chinamasa further said there shall be no foreign travels to workshops where the country has diplomatic representation.

“…There will be no first class travel permitted across the board save for the presidium.


“On foreign service bill, currently government is experiencing serious challenges in funding 46 embassies and consulates.

“The annual budgetary requirements are $65 million which is far above budget capacity giving rise to arrears which have accumulated to $17,3 million,” he said.

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