"We Have To Eat What We Kill" - Mthuli Responds To MPs' Demands For More Funds
Finance and Economic Development Minister Mthuli Ncube said that the government has no means to fund demands by ministries in the 2023 national budget.
Ncube said this in the National Assembly on Tuesday following complaints by MPs that government departments were severely underfunded.
Various reports by Parliamentary Portfolio Committees on the 2023 national budget had indicated that ministries were underfunded. Ncube said:
I have listened carefully to all presentations by portfolio committees. There is not a single portfolio committee that (is happy with the budget allocation for the ministry that they supervise.)
They all said it is inadequate, and that is what it is frankly. It may be inadequate, but we have to live within our means.
You will notice that I presented a budget of $4.2 trillion, but the bids were three times this figure.
Clearly, we cannot support that kind of expenditure request. We just do not have the resources.
The resources that we can reliably generate are just over $4 trillion.
We have always said, in terms of the Public Debt Management Act, debt should not go above 70% of gross domestic product (GDP) and we are straining ourselves not to breach that because the higher expenditure means that we have to borrow more, and we end up breaching the hurdle and that is not good for us.
On the issue of underfunding — that we are not giving ministries what they request for — ministries are always requesting three times the revenue that the economy can generate.
This economy is stuck somewhere at around 80% of the GDP in terms of revenue to GDP ratio. That is all it can afford and you cannot extend beyond that 80% of GDP.
It is not even underfunding. We are funding what we are able to fund with the resources we have.
Ncube also explained that Treasury has been disbursing budgeted resources to ministries and government departments very late due to the current cash budgeting system being implemented.
This means that government spending is restricted to revenue collected only. Said Ncube:
You can only spend what you have collected. Some put it as ‘you eat what you have killed’.
You cannot eat more than what you have killed unless you borrow someone’s kill. We have to do this with no recourse to the central bank.
In 2019, the government stopped borrowing from the Reserve Bank of Zimbabwe in order to comply with the Public Finance Management Act. | NewsDay
