The 2011 National Budget Statement – part 1

Posted on 26/11/2010

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Highlights: –

Point 16 – vital to note this bit right here: –

Specific key concerns highlighted by stakeholders during the consultations for the attention of the Budget included the following:

  • Guaranteeing uninterrupted power supply.
  • Reconstruction and rehabilitation of roads infrastructure.
  • Guaranteeing clean water supply and improved sanitation services.
  • Improving health and education social service delivery, among others.
  • Social protection and safety nets, including for people living with disability.
  • Support for agriculture and household food security.
  • Continued stability in the price level, including sustainable wage levels.
  • Positive Interest rates on bank deposits, and Access to affordable lines of credit.
  • Employment creation.
  • Abuse of public resources and corrupt practices.
  • Perceptions of exclusion in development programmes.
  • Political discord in the Inclusive Government and Absence of National healing.

Manufacturing – erratic power supply and absence of medium to long term capital continue to adversely impact on domestic industrial cost of production, compromising competitiveness of the manufacturing industry and limiting growth to the anticipated modest 2.7% in 2010.

Mining: – mining has been the fastest growing sector since 2009, with growth up from 33.3 % in 2009 to an estimated 47% in 2010.

Significant realisation of the potential of the country’s mining industry will require up to US$3-5 billion investment towards the recapitalisation of mining houses over the next 3-5 years broken down as follows:

Gold – 1.000

Platinum – 1.200

Ferrochrome – 0.250

Nickel – 0.110

Coal – 0.280

Diamonds –  0.300

Tourism: – Tourist arrivals are expected to increase to 2.2 million this year, from 2 million in 2009. Reflecting this, tourism receipts are estimated to realise growth of 47% to US$770 million, from US$523 million in 2009. Tourism is anticipated to grow by 6% in 2011, benefitting from the continued recovery in both global and domestic economic activity, and also on the back of targeted marketing strategies.

Financial Sector: – As at 30 September 2010, sixteen out of twenty four banking institutions (excluding the POSB) were in compliance with the minimum paid-up capital requirements. Most banking institutions’ balance sheets showed resilience to shocks with respect to all the risk assessment factors, which include credit, sovereign, foreign exchange, interest rate and liquidity risks. Against this background, bank deposits continue to grow by a monthly average of US$82 million from US$1.3 billion recorded in January 2010 to reach US$2.3 billion in September 2010, signifying improved confidence in the sector.

External Sector: – the latest balance of payments forecasts to year end show total exports growing by 25% in 2010, from US$2 billion in 2009 to US$2.5 billion. Projected mineral exports to year end of US$1.159 billion account for 46% of this, followed by agriculture, US$456.3 million; and manufactured exports, US$393.3 million.

External Debt Development: – notwithstanding the green shoots on the economic recovery front, the country remains saddled with an unsustainable external debt amounting to US$6.9 billion which is some 103% of GDP. About 75.3% of this debt is medium to long term and is owed to official creditors. ‘…About 75.3% of this debt is medium to long term and is owed to official creditors’.

Of the public and publicly guaranteed debt of US$6.4 billion, total external arrears comprised US$4.7 billion by 31 October 2010 and are owed to:

• Multilateral Financial Institutions – US$1.469 billion

• Paris Club – US$0.386 billion

• Non Paris Club – US$0.072 billion’

Recurrent Expenditure Developments

The 2010 National Budget provided for recurrent expenditures of US$1.26 billion. Cumulative recurrent expenditures to October 2010 amounted to US$1.2 billion, representing 82% of the actual expenditures.

The bulk of the current expenditures were on employment costs, goods and services, grants and transfers.

Government is still meeting 100% medical aid contribution to Premier Medical Aid Society for all civil servants in 72 view of low remuneration in the Public Service. To date, about US$23.4 million has been disbursed for this purpose.

Foreign Travel: – foreign travel remains unsustainably high relative to other critical services.

To October 2010, foreign travel expenditures amounted to US$29.2 million, against an original budgetary provision of US$24.2 million, representing 3% of total recurrent expenditure.

Education: – Government also supported 34 000 local and foreign based students through payment of tuition fees and stipends at a cost of US$8.4 million

In 2010, Government in partnership with cooperating partners supported 5 575 primary schools with a package of four textbooks per pupil, stationery and steel cabinets valued at US$52 million. This intervention is set to reduce the textbook to pupil ratio from 1:30 to 1:1.

Health: – Improving health services delivery was also prioritised in 2010 in line with the Millennium Development Goals.

Government disbursed funds amounting to US$115 million to cater for health institutions operations.

This was further augmented by US$12 million for the resuscitation of Gwanda, Masvingo, Ngomahuru, Ingutsheni, Gweru and Karoi hospitals. This intervention has seen an increase in patients receiving treatment at the institutions

Social Protection: – To contain school drop-out rates at both primary and secondary level, Government and development partners availed US$30 million towards the payment of school fees and examination fees for vulnerable children, targeting 625 000 primary school pupils and 160 000 secondary school pupils.

Agriculture: – Productivity in agriculture still lags behind that of many other countries. For example, average maize yields stand at less than one ton per hectare.

Constitution Making Process: – As part of its commitment to fulfil the provisions of the Global Political Agreement, Government in partnership with cooperating partners availed resources to the tune of US$13.7 million towards the Constitution Making Process.

Of this amount, Government contributed US$4.8 million towards training of teams and the Outreach Programme.

This intervention has enabled outreach teams to fully cover all the Provinces by the end of October 2010.

Maintenance of Infrastructure: – The poor state of many Government buildings remains unacceptable as a result of a number of factors, which include under-funding for maintenance and repairs, negligence, lax security systems and unchecked vandalism.

The US$2 million disbursed towards maintenance of buildings and fixed equipment remains inadequate in light of the above challenges and, hence, the need for the Budget to focus on this.

Energy: – The US$2 million disbursed towards maintenance of buildings and fixed equipment remains inadequate in light of the above challenges and, hence, the need for the Budget to focus on this.

Transport: – An amount of US$10.9 million was spent on rehabilitation of roads and bridge construction, US$8.8 million; upgrading of airports, while US$4.3 million, was on rail infrastructure.

Information Communication Technology: – To improve use of information communication technology,

Government has availed resources amounting to US$7.7 million towards establishment of the communication backbone infrastructure, largely through Tel-One.

The resources were meant for the optic fibre link from Harare to Mutare. To date, 228 km out of the 261 km have been excavated and pipes covering 101km have been laid.

To date an amount of US$50 000 has been disbursed towards the e-Government programme, a development that has seen the development of 28 websites for Ministries.

The target is to create an e-government platform which will enable citizens to obtain Government information and services from their local district offices without waiting in queues and travelling long distances.

So far, Government has availed an amount of US$1 million for the procurement of computers for schools, both primary and secondary. This has seen a total of 330 computers being procured out of a target of 589, for distribution across the Provinces

Entire document: – The 2011 National Budget Statement

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