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ZIMCODD flags unauthorised Treasury expenditure

The Zimbabwe Coalition on Debt and Development (ZIMCODD) has flagged a condonation request made by Treasury for unauthorised expenditure incurred by the Ministry of Finance and Economic Development.

The expenditure amounts to Z$6 783 930 028 for 2019 and ZWL$100 690 788 418 for 2020.

Finance Minister Prof Mthuli Ncube made the request through the Financial Adjustment Act, 2022, in line with Section 307 of Zimbabwe’s Constitution, where Treasury asks Parliament to condone unauthorised expenditure.

However, Section 307 of the constitution states that condonation of the unauthorised expenditure must be no later than 60 days after the extent of the unauthorised expenditure has been established.

In its Public Resource Management Situational Report for June published recently, which analyses the utilisation of public resources across the country, ZIMCODD, a social and economic justice watchdog, questioned why Treasury took long to seek condonation for expenditure that occurred in 2019 after it presented two successive budgets together with their reviews in 2020 and 2021.

ZIMCODD interrogated how the government did not check its financial records on time, noting such requests reduce public trust in government as it worsens the current currency and inflation crisis.

“Taking from the foregoing, the condonation bill comes two years after the ‘expenditure’ was made and this distorts the authenticity and sincerity of budgetary processes same as the ideologies underpinning the budgets. In 2019, the total budget expenditure was US$8.2 billion against bid proposals of US$15 billion by line ministries and the restrained spending seemed to match with the ‘Austerity for Prosperity’ dictum paraded by the government,” ZIMCODD said,

The economic watchdog noted that the unauthorised spending of Z$6 783 930 028 increased the 2019 total budget expenditure to almost the US$15 billion proposed by line ministries.

“The condonation of the Z$6 783 930 028 according to the bill is not accompanied by a breakdown of the uses of the money. This reflects government’s double standards in touting for stability of fundamentals and whilst secretly printing money to sponsor the insatiable quest to spend,” ZIMCODD said.

“Whereas the constitution directs the Minister to raise the bill within 60 days of establishing the excessive expenditure, it is not believable that the excess expense for 2019 and 2020 were established at the same time. This definitely is a punishable breach of the constitution.”

On the unauthorised expenditure for 2020, ZIMCODD said the national budget for that year

was worth ZWL$63 billion, whose unsanctioned expenditure declared through the Financial Adjustment Act is Z$ 100 690788 418 – implies that the total expenditure for 2020 was Z$163.7 billion.

“The excess expenditure does not tally with the financing means defined in the budget document thus, the government printed money to meet the brazen expenditure. The excess expenditure is not explained with respect to the use of the resources and worryingly, the time frame in which these excess expenditures happened was associated with meagre civil servant salaries and protracted industrial action which led to the crippling of the health and education sectors,” ZIMCODD said.

ZIMCODD observed that it was in 2019 to 2020 where the Minister declared budget surpluses, which do not make sense given the condonation bill.

“The US$100 million surplus from 2020 allocated to the purchase of vaccines in 2021 is questionable and this shows that national resources are not being managed with the requisite diligence and conformance with statutory provisions. The excess expenditures, likely sponsored by money printing, negates the rhetoric of strictly managing money supply growth, hence the galloping inflation in the economy,” said the economic watchdog.

The economic watchdog warned that with such a precedent, it was likely that the Treasury would also come up with condonation bills for for 2021 and 2022given the unnecessary expenditure by the government.

“It is imperative for the government to adhere to constitutionalism regarding the management of state resources thus stringent penalties must be put in place to deter individuals from taking unitary decisions that affect the lives of many Zimbabweans. Also, reforms should be enacted to grant parliament the powers to sanction government expenditure before such expenditures are executed,” ZIMCODD said.

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