HARARE, March 24 (The Source) – Government expenditure for the fourth quarter amounted to $1,432 billion against a target of $1,006 billion, resulting in an expenditure overrun of 42,3 percent, the latest Treasury bulletin shows.
In the fourth quarter, recurrent expenditure was were $1,025 billion, while capital expenditure and net lending amounted to $407,2 million. Much of the recurrent expenditure emanated from employment costs, taking up 66 percent of total expenditure and about 92 percent of revenue collected in the period.
Revenue amounting to $902,45 million was collected in the fourth quarter compared to $907,35 million in the third quarter. Compared to the fourth quarter of 2015, revenue was down by 18,2 percent, its lowest since 2013.
Zimbabwe has been running a budget deficit as revenue collections continue to fall below expenditure.
For the whole year 2016, expenditure amounted to $4,923 billion, made up of recurrent expenditure of $3,956 billion and $967,5 million in capital expenses and net lending.
However, revenue collections of $3,502 billion were realised in 2016 against an annual target of $3,850 billion, translating into a negative variance of 9 percent. The 2016 revenue was the equivalent of 24,7 percent of GDP, down from 26,3 percent of GDP collected during the previous year.
Given the 4th quarter revenues of $902,5 million and expenditures of $1,432 billion, a resultant quarterly budget deficit of $529,5 million was realised.
This budget deficit was funded mainly through issuance of treasury bills (TBs).
“In the face of declining revenues, the gap was largely financed through domestic borrowing, the bulk being Treasury Bill issuances”, read the treasury bulletin.
“Such a level of Government domestic borrowing is unsustainable as it crowds out private sector borrowing for productive activities.”
According to the central bank, there are currently $2,079 billion worth of TBs in the market, $450 million of which were issued to raise budgetary support for the government.
Earlier Treasury data showed the government had run up a $1.2 billion budget deficit in the 11 months to November 2016.