Zimbabwe in rare budget surplus in January

Published: 28 May 2014

Government recorded a $16 million budget surplus in January this year on the back of cost containment in recurrent expenditure and stingy expenditure in capital projects.

Official treasury statistics show that government total income stood at $252m against a total expenditure $236m to conclude a rare month for a debt ridden nation.

Taxes on income and profits contributed $85m, while tax on goods and services contributed $140m, other taxes and non tax revenue raked in $17m and $10m respectively.

Government wage bill for the month under review stood at $137m against a budgeted figure of $162m. This left a positive variance of $25m.

Capital expenditure and net lending was subdued at $10m, this is despite that government budgeted $18 for the month to register a negative variance of $8m.

However, the surplus was short-lived as government retained to its knack for over spending in the month of February.

During the month under review, total income was down at $236m against a total expenditure of $265m to register a negative variance of $29m.

Wage bill for the month shot from $137m in January to $155m against $162m that was budgeted for.

The statistics indicate that the slightest movement on government's employment cost has an effect on fiscus. It is becoming a reality that government can release funds for capital projects by bringing down its ballooning wage bill.

Currently, government is on a Staff Monitored Programme (SMP) - an informal agreement which allows the International Monetary Fund (IMF) to monitor the government's economic programmes - with IMF last year in June in a bid to clear its $10 billion.

On conclusion of its 2014 Article IV Consultation visit in the country in March, IMF urged government to improve its business climate, transparency of its minerals regime and lower its wage bill to achieve economic recovery in the medium-term.
- Zim Mail