HomeNewsBrace for real pain — Biti

Brace for real pain — Biti

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Finance minister Tendai Biti yesterday projected a $3,1 billion National Budget for 2012 with the largest chunk going to civil servants’ wage cost and the remainder to capital expenditure.

Presenting his Mid-Term Fiscal Policy in Harare yesterday, Biti said the country should brace for real pain in 2012 as the Budget would be faced with a $2 billion wage bill and capital expenditure of $1,1 billion.

“The real problem is not in 2011, it is in 2012 because we are going to start off with a budget of $2 billion and $1,1 billion on anything else. The real gnashing of teeth will be in 2012 and you must brace for a long winter of despondency,” said Biti.

He said the civil service wage bill was consuming 65% of the Budget with the remaining 35% left to go towards the other needs of the 13 million people in the country.

The minister said in January staff costs were 52% of the Budget and expenses were at 48%.

Biti said when government awarded a salary rise for its staff in January, a $110 million shortfall was created and the July salary increase would need an injection of $42 million every month to be sustainable.

In total, he said, until December this year $262 million would be the extra money required to pay for staff costs by government.

“The Ministry of Mines said it will provide through diamond revenue sales $167 million to the end of year, but it is not anything near to the $262 million required,” he said.

Biti said there was need to put in place success measures that included resource mobilisation, restriction on foreign travel which is consuming $30 million from the Budget more than education, a key component of the economy.

He said a civil service audit needed to be done to remove the 75 000 ghost workers and realise savings from the audit. Biti said a revenue retention scheme needed to be put in place.

Meanwhile, Biti maintained the 2011 Budget projections, saying the economy was on course to attain gross domestic product growth and rein in inflation.

He said the deposit base stood at $2,85 billion, while imports were at $3,4 billion and exports at $2 billion. The month-on-month inflation has been constant and the country was on target to meet the 4% by year end.

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