Corban Madzivanyika, the Citizens Coalition for Change (CCC) Shadow Minister of Finance, has demanded that Finance and Economic Development Minister Mthuli Ncube explain a $3 billion budget deficit that was incurred after Zimbabwe abandoned the Zimbabwe dollar and adopted a new gold-backed currency, the ZiG in April, reported <a href="https://cite.org.zw/ncube-must-account-for-us3bn-budget-deficit/">CITE</a>.
Speaking to journalists shortly after Ncube’s delivery of the Mid-Term Review statement on Thursday, Madzivanyika said the approved 2024 budget was around ZWL$58 trillion, which is equivalent to approximately $9.7 billion. He added:
<blockquote>
Fast forward to July 2024, in his Mid-Term fiscal review statement, the minister says the current budget is now ZiG 87 billion, which is equal to 6 billion dollars using a rate of 14.5. It is so worrisome that the budget has been eroded by close to 3 billion dollars.
</blockquote>
Madzivanyika requested a detailed explanation from Ncube regarding this significant deficit. However, the debate was adjourned by the Speaker before MPs debated it.
Ncube’s explanation for the budget shortfall was simply that “the introduction of the ZiG as legal tender on 5 April 2024 has necessitated reconfiguration of the 2024 approved national budget to reflect the change of our currency.”
This explanation, however, was deemed insufficient by Madzivanyika, who asked for a thorough accounting of the missing funds.
Ncube’s mid-term review also revealed that the government spent more funds than revenue collections during the first six months of 2024. Said Ncube:
<blockquote>
In terms of performance during the first six months of the year, revenue collections amounted to ZiG 36.5 billion against expenditures of ZiG 38.9 billion dollars.
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Ncube also revised the projected economic growth from 3.5 per cent to 2 per cent, citing the impact of the El Niño-induced drought on the agricultural sector.
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Corban Madzivanyika, from CCC, wants Minister Ncube to explain why there is a $3 billion budget deficit in Zimbabwe's new gold-backed currency. The budget went from $9.7 billion to $6 billion, and no one knows where the missing $3 billion went. Ncube says the deficit is because they changed the currency. Madzivanyika wants more details. The government spent more money than they collected in the first half of the year. The economy is also not doing well because of a drought. Madzivanyika is seeking answers and accountability for the missing funds.

CCC Shadow Finance Minister Seeks Explanation For US$3 Billion Budget Deficit

Finance, Economic Development and Investment Promotion Minister Mthuli Ncube has proposed a temporary import duty on fuel in transit to other countries, in a move aimed at curbing rampant cases of transit fraud, reported <a href="https://www.zimlive.com/ncube-proposes-temporary-duty-on-fuel-in-transit-to-curb-rampant-fraud/">ZimLive</a>.
In his Mid-Term Budget Review Statement presented to parliament on Thursday, Minister Ncube acknowledged that the electronic cargo tracking system (ECTS) being used by the Zimbabwe Revenue Authority (ZIMRA) has failed to effectively stop transit fraud.
The government introduced the ECTS in 2017, which uses electronic seals and transmitters to monitor cargo, particularly fuel imports. This was a response to increasing incidents of transit fraud, where goods imported under the Removal in Transit (RIT) scheme were being offloaded on the local market without paying the required duty.
However, despite the implementation of the ECTS, Minister Ncube said that rampant cases of transit fraud continue unabated. He said:
<blockquote>
I, therefore, propose to secure duty and levies on fuel imported under Removal in Transit Facility, by imposing payment of duty at the Port of Entry.
Such duty and levies shall be recovered on acquittal at the Port of Exit.
This measure, which takes effect from 1st August 2024, will not apply to fuel uplifted from National Oil Infrastructure Company, Msasa Depot.
The Zimbabwe Revenue Authority is directed to manage the duty refund process efficiently through dedicated bank accounts.
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Ncube also proposed measures to deal with under-declared fuel imports. He said:
<blockquote>
Cognisant of the opportunity by operators to under-declare fuel imports, as well as abuse of the Removal in Transit Facility, I propose to introduce mandatory Fiscalisation of domestic fuel sales, with effect from 1st November 2024.
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Finance Minister Mthuli Ncube wants to stop fraud with fuel being sent to other countries. He says the current tracking system is not working well. A new plan is to charge duty on fuel when it enters Zimbabwe, and get a refund when it leaves. This will start in 2024 and won't apply to local fuel. There will also be new rules to make sure fuel is declared correctly. The goal is to stop people from cheating the system and selling fuel without paying the right taxes.

Mthuli Proposes Temporary Duty On Fuel In Transit

Zimbabwe’s foreign currency remittances rose by 16.5% to hit a record US$1.2 billion in the first half of 2024 resulting in a favourable impact on the country’s current account balance.
This was said by Finance Minister Mthuli Ncube while presenting the Mid Term Budget Review Statement in Parliament Thursday. He said:
<blockquote>
Remittances grew significantly by 16.5%, from US$1 billion in the first half of 2023 to US$1.2 billion in 2024, reflecting higher inward remittances from the diaspora, resulting in a favourable impact on the current account balance.
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Minister Ncube also revealed that total foreign currency receipts increased by 9.5% to US$6.2 billion during the period from January to June 2024. He said:
<blockquote>
Mr Speaker Sir, total foreign currency receipts increased by 9.5% to US$6.2 billion during the period from January to June 2024, from US$5.6 billion received during the same period in 2023, largely driven by the growth in export receipts, mainly from gold, agriculture commodities and manufactured 
products, as well as diaspora remittances.
In line with this improvement in foreign currency receipts, preliminary estimates indicate that the current account recorded a surplus of US$19.2 million in the first half of 2024, a turnaround from the deficit of US$13.8 million recorded in the same period last year.
To year-end, the current account surplus is projected to narrow to US$44.5 million in 2024, relative to a surplus of US$133.9 million recorded in 2023.
</blockquote>
Ncube said the country’s total debt has soared to US$20.5 billion with the government resorting to local borrowing.
The country’s stock of debt as at end of June 2024 amounted to an equivalent of around US$20,5 billion with external debt making up US$12 billion and domestic debt US$8.47 billion.
The debt stock is broken down as 58.7% external debt and the remainder being domestic debt 41.3%. Said Ncube:
<blockquote>
Mr Speaker Sir, the country’s stock of debt as at end of June 2024 amounted to ZiG287.2 billion, comprising of external debt of ZiG168.5 billion and domestic debt of ZiG118.7 billion.
The debt stock is broken down as 58.7% external debt and the remainder being domestic debt 41.3%.
</blockquote>
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Zimbabwe got a lot of money from people overseas, reaching $1.2 billion in the first half of 2024. This helped the country's financial balance. The total money coming from outside increased by 9.5% to $6.2 billion. The country's debt also went up to $20.5 billion, with the government borrowing from inside the country. Most of the debt is external, meaning the country owes money to other countries. The Finance Minister shared all this information in Parliament.

Zimbabwe's Foreign Currency Remittances Hit US$1.2 Billion

Economist Gift Mugano has warned that the Zimbabwean economy is rapidly approaching a crisis similar to the one experienced in 2008 when the country’s GDP growth plummeted to -17.7% and the Zimbabwean dollar became virtually worthless.
Reacting to the Mid-Term Budget Review Statement presented to parliament on Thursday by Finance, Economic Development and Investment Promotion Minister Mthuli Ncube, Mugano stated that the Treasury boss should consider introducing a supplementary budget to address the financial shortfall caused by the depreciation of the local currency.. Wrote Mugano on X:
<blockquote>
<h2>The mid-term budget review exposed economic rot</h2>
Forget about nice phrases from my esteemed brother [Mthuli Ncube] – consolidating stability…There is nothing to consolidate. The economy is in a dire situation. The economy going towards the graveyard. We are fast approaching 2008.
These are the facts:
1. Contribution of IMTT to total revenue fell drastically from about 16% in 2019 to 3.4% in 2024 – signifying deepening informality and collapse of the formal economy;
2. Percentage of people employed in the informal sector increased from 75.6% in 2019 to 87.7% in December 2023 – signifying deepening informality and the collapse of the formal economy. @MthuliNcube in the NDS1 was targeting to reduce informal employment to 70% (i.e., increasing formal employment to 30%) by 2025. Right now formal employment is sitting at 11.3%;
3. Youth unemployment is standing at 3.5 million – 3.5 million young people are unemployed. The majority of the youths are drug addicts.
4. National debt has ballooned to US$20.8 billion (ZiG287.2 billion/13.78) up from US$18.73 in 2023, i.e., a staggering US$2 billion increase;
5. Close to 50% of the population is living in extreme poverty.
6. Both the education and health sectors are in intensive care units.
7. Close to 25% of the children under 5 are suffering from stunting growth – future generation &amp; human capital is threatened;
8. Businesses executives tell me that they are failing to access forex from banks with some securing 5-10% of their forex requirement notwithstanding the assurances given by the @ReserveBankZIM
9. Exchange rates are running away – we hear banks are using rates averaging ZiG22.30/US$1 while parallel market rates are hovering around ZiG24/US$1.
10. Aggregate demand is plummeting – mari haisi kubatika or kutenderera – which is now a common statement in the market.
Until GOZ and all stakeholders in the ecosystem of policymaking confess the truth about the state of the economy, we will sleepwalk into 2008.
In view of the fact that the Honourable Minister of Finance didn’t table a supplementary budget, the following question is pertinent:
Official exchange shot from ZWL6000/US$1 (i.e. at the time you presented the 2024 budget in Nov 2023) to ZWL33,882 (now equivalent to ZiG13.52) as of 5 April 2024. Resultantly, the national budget which was equivalent to +US$9 billion when it was presented (under assumption of stable exchange rates) was eroded to US$1.68 billion. Isn’t this enough reason to do a supplementary budget?
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Zimbabwe's economy is in big trouble again, like in 2008. A famous economist named Gift Mugano said that the economy is getting worse. The government's budget is not enough, and many people are suffering. Lots of people are losing their jobs and living in poverty. The country's debt is growing, and children are not getting proper healthcare and education. The value of money is dropping, and businesses are struggling. Mugano warned that if things don't change, Zimbabwe could face a crisis like in 2008.

Zimbabwe's Economy Going Towards The Graveyard - Mugano

Finance, Economic Development and Investment Promotion Minister Mthuli Ncube has revised Zimbabwe’s projected economic growth for the year from the earlier forecast of 3.5% to 2%.
This downward adjustment is due to the devastating impact of the El Niño-induced drought.
In his Mid-Term Budget Review Statement presented to parliament on Thursday, Minister Ncube explained that the projected increase in winter wheat production during the current season will help mitigate the contraction in the agriculture sector. He said:
<blockquote>
The domestic economy is now projected to grow by 2% in 2024, down from the 2024 National Budget projection of 3.5%.
This downward revision is mainly attributed to the more severe than expected impact of the El-Nino induced drought on agriculture output.
The growth projection is, however, subject to upside potential as wheat output during this winter season could be higher than projected.
This would reduce the contraction of the agriculture sector and ultimately improve the overall GDP outcome for this year.
</blockquote>
Ncube also said the introduction of a new gold-backed national currency, the ZiG, on 05 April this year stabilised prices in the economy. Said Ncube:
<blockquote>
Government undertook currency reforms culminating in the introduction of the Zimbabwe Gold (ZiG) replacing the Zimbabwe dollar on 5th April, 2024.
In that regard, the ZiG month-on-month inflation remained stable at 0% in June from -2.4% in May 2024, while the US$ month-on-month inflation stood at -0.3%, from 0.1% in May 2024.
In the outlook period, inflationary pressures are expected to remain subdued due to the tight monetary and fiscal policies being pursued by the authorities aided by the dissipating negative inflation expectations as the local currency unit remains stable against major currencies.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe's economy was expected to grow by 3.5%, but now it's projected to only grow by 2% because of a bad drought. The Minister of Finance explained that more wheat production could help improve things. They also introduced a new currency called ZiG which helped keep prices stable. Inflation is low and expected to stay that way because of good policies. Hopefully, the economy will get better with more wheat production and stable prices.

Mthuli Revises Zimbabwe’s Economic Growth Projection

The Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, delivered the 2024 Mid-Term Budget Review Statement under the theme “Consolidating Economic Transformation” on Thursday.
Minister Ncube rebased the initially approved expenditure for the 2024 Budget from ZW$58.2 trillion to ZW$87.9 billion.
He revealed that in the first six months of the year, total expenditure exceeded earnings by ZW$2.4 billion. This was after spending ZW$38.9 billion from total revenue collections amounting to ZW$36.5 billion. Said Ncube:
<blockquote>
Revenue projections to year end stand at ZiG93.221 billion (22% of GDP), against expenditures of ZiG96.8 billion and a resultant deficit of ZiG5.6 billion
Since the introduction of the ZiG currency, the economy is experiencing relatively stable prices and exchange rates.
In this regard, the fiscal policy thrust is sustaining the prevailing stable environment necessary for inclusive economic growth to achieve the objectives of the NDS 1 and Vision 2030.
</blockquote>
Ncube also announced measures to boost demand for the ZiG currency.
One of the key measures is that government departments will now accept payment for goods and services in the local ZiG currency to help “strengthen demand” for the ZiG.
Ncube said there are also plans to increase the circulation of ZiG notes without raising the overall money supply. 
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Mthuli Ncube talked about the budget, ZiG2.3 billion was spent more than earned. There is a plan to boost the demand for the ZiG currency. Government will now accept payments in ZiG. The economy is stable. Ncube announced new measures to help the economy grow. The budget has been increased to ZW$87.9 billion. There is a deficit of ZiG5.6 billion. The plan is to make sure the economy grows and reaches its goals.

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