Tuesday, 16 April 2013
Zimbabwe misses revenue target
Finance Minister Tendai Biti (left) and the acting deputy accountant-general Mr Cliff Gumbira
ZIMBABWE missed its revenue target for the first quarter of the year, as Government warns this year’s economic growth forecast may not be achieved.
Finance Minister Tendai Biti said yesterday, in an update on the State of the Economy, that while the macro-economic environment had remained “stable”, the economy “exhibits”
a number of downside risks which may impact on growth.
In the 2013 Budget, Minister Biti had projected that the economy would expand by 5 percent this year.
“The weaknesses are reflected through liquidity and financing challenges, limited revenue growth, as well as widening of the current account gap emanating from depressed exports and overdependence on imports,” said Minister Biti.
“As a result, capacity utilisation of most productive sectors remains well below potential, dampening prospects of economic recovery.”
Since the formation of the inclusive Government and the adoption of the multi-currency regime, Zimbabwe has enjoyed strong economic growth, although the robust recovery achieved between 2009 and 2011 slowed down last year.
The finance minister was concerned over the growing budgetary pressures.
Government collected US$765 million, against a target of US$825 million. “The underperformance of revenues, against the background of high employment costs, some critical external loan repayment obligations, the referendum, elections and the unbudgeted for new requirements in support of grain importations, all pose major pressures on the Budget,” said Minister Biti.
Zimbabwe held a referendum on the draft constitution last month and is due to hold general elections by June 29 this year. Minister Biti said the polls would require US$132 million.
He said Government has also paid US$77 million towards retiring external debts.
The country had “a bad agricultural season”, with maize output expected at 900 000 tonnes, against 1,4 million required to adequately feed the entire nation.
About US$51 million is required to import 150 000 tonnes of grain. But Government would provide US$5 million. Private players would import the reminder.
Of the total revenue, tax inflows amounted to US$739,1 million against a target of US$780,2 million, while non-tax revenue was US$26 million. Diamond revenues amounted to about US$5 million against a US$15 million target, Minister Biti said.
The public service wage bill absorbed 75 percent of the total revenue generated, while US$51,6 million was disbursed for capital projects. Inflation was contained below 3 percent, recorded at 2,5 percent in January, 2,98 in February and 2,76 percent last month.
With regards to key productive sectors, mining performed within the 2013 Budget targets.
But agricultural yields are expected to be below forecasts due to shorter rainy season.
Trade deficit in the period widened, with imports, at US$1,7 billion, outstripping exports at US$689 million from US$768,2 million in the same period last year.
This translates to a trade gap of more than US$1 billion. Minerals contributed the bulk of the exports at US$473,6 million. Platinum dominated mineral exports, with US$210 million, followed by gold at US$124 million and diamonds at US$113,7 million.