HARARE, July 8 (The Source) – The Zimbabwe government continues to dominate the local credit market, with domestic debt rising 40 percent to $4 billion in the quarter to March.
With falling tax revenues and little access to concessional lines of credit from international lenders, the cash strapped southern African nation has resorted to issuing Treasury Bills to finance its operations.
In April, Finance Minister Patrick Chinamasa said the government had issued Treasury Bills totalling $4,417 billion since 2014.
According to the latest treasury figures domestic credit increased by 17.5 percent to $7.92 billion in March 2017 from $5.88 billion in March 2016.
“Net claims to the central Government increased by 40.2 percent to $4.034 billion in March 2017. Credit to the private sector decreased by 0.3 percent from $3.50 billion in March to $3.49 billion March 2017,” reads the treasury report.
Analysts have warned that the continued issuance of TBs crowds outs lending to the private sector and if left unchecked would compound liquidity shortages in the economy
Total expenditures for the quarter to March 2017 amounted to $1.1 billion exceeding revenue of $869,2million.
“Recurrent expenditures were $879.1 million, while capital expenditures and net lending amounted to $173.3 million. Employment costs constituted 67 percent of total expenditure, while interest obligations amounting to $41 million were paid in the first three months”.
Disbursements of $142 million were made towards capital and other development projects.
Exports increased by 16 percent, to reach $723.8 million in the first quarter of 2017, compared to $625.2 million realised in the corresponding period in 2016.
The major exports include tobacco at $203 million, gold $182 million, ferro-chrome $84 million and nickel $85 million. South Africa remained the biggest trading partner, with exports worth $561 million. Mozambique was the second, recording $87 million worth of exports.
Imports in the first quarter stood at $1.34 billion compared to $1.30 billion recorded in the corresponding period in 2016, representing a 3 percent increase.