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“We just do not have the resources” – Mthuli Ncube tells govt departments

Finance Minister Mthuli Ncube has claimed that the government does “not have the resources” to finance ministries to the level that they expect.

Responding to the MPs who had pointed out that government departments were underfunded, Ncube on Tuesday said the fiscus could only fund a third of the votes demanded by the ministries for expenditure next year.

This comes after various reports by Parliamentary Portfolio Committees on the 2023 national budget pointed out that ministries were grossly underfunded.

“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,” Ncube said.

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“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 ZWL4 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.”

MPs had also complained that the Treasury has been disbursing budgeted resources to ministries and government departments very late.

But Ncube explained that this was a result of the current cash budgeting system being implemented, which entails that government spending is restricted to revenue collected only.

“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,” Ncube said.