Treasury Implements Expenditure Containment Measur...

Treasury Implements Expenditure Containment Measures Amid Fiscal Strain

Audrey Galawu

Assistant Editor

The Ministry of Finance and Economic Development has sounded the alarm over the country's dire fiscal situation, unveiling stringent measures to manage government expenditure for the remainder of 2024.

In a circular dated November 13, 2024, Secretary for Finance George T. Guvamatanga warned, “The local currency unit (ZWL) recently depreciated by 43% against the United States dollar, resulting in a substantial mismatch between revenue inflows and local currency expenditures that immediately adjusted to the new exchange rate.” He further noted, “This has severely constrained fiscal space for the last quarter of 2024.”

The circular highlighted the added strain of a backdated salary review for civil servants in October 2024, further depleting government resources. Guvamatanga explained that the financial challenges had left the Treasury with no choice but to prioritize critical expenditures while implementing cost-saving measures.

To navigate the fiscal crisis, Treasury announced a series of measures aimed at reducing costs.

“Prioritise payment of outstanding unfunded payment runs,” the circular stated, ensuring essential commitments are met.

"Foreign travel will only be approved if funded by external agencies, with Guvamatanga adding that such concurrence will exclude “agencies other than Government, Local Authorities, and State-Owned Enterprises.”

"All local workshops are to be deferred, except those expressly authorized by Treasury.

"Fuel allocations for operational purposes will be halved, with “a revised schedule of fuel allocations to MDAs attached as Annex (A) / 50%," further reads the circular.

Treasury indicated that non-wage budget support for the months of November and December 2024 will be constrained. Departments and agencies have been directed to prioritize expenditures in line with these measures.

The circular specifically pointed out the need to fund “critical inescapable expenditures that include the 2024 bonus award, food deficit mitigation support, 2024/25 agriculture input support, and utilities among other critical requirements.”

As the economic pressure mounts, Guvamatanga urged all ministries, departments, and agencies to cooperate with the outlined measures, stating, “Be guided accordingly.”

The circular was copied to the Minister of Finance, Professor Mthuli Ncube, and other senior officials, signaling the government’s collective effort to manage Zimbabwe’s fiscal crisis as it transitions into the 2025 fiscal year.

This latest development sheds light on the country’s deepening economic woes, with policymakers forced to implement austerity measures to ensure the continuity of essential government operations.