The government of the Southern African country is cutting down spending on its budget in response to its currency devaluation, as reported by Bloomberg.
Non-wage budget support will be revised, following the Treasury’s request to government departments regarding their spending commitments for the remainder of the year.
According to a circular to departments obtained by Bloomberg and verified by Treasury, Zimbabwe will need more money to cover important, inescapable expenditures including the 2024 bonus payout, food deficit mitigation, agricultural input support, and utilities.
Some of the measures the country is looking at to cut the cost of running its government includes cutting down on foreign travel and fuel allocations by 50%, and deferring local workshops.
George Guvamatanga, secretary for finance and economic development, noted in a circular that the recent devaluation of the ZiG currency brought about a “substantial mismatch” between revenue, which under certain situations is a month behind schedule, and local-currency expenditures, which must be paid for immediately.
At the end of this month, Zimbabwe will unveil its 2025 budget. But according to Finance Minister Mthuli Ncube, financing bids have already topped ZiG 700 billion, much beyond the ZiG 140 billion budget cap.
The finance minister in an interview with Bloomberg last week had alluded to the progress so far, government cut backs and agricultural initiatives have brought to the country’s economy.
“The economy is set to grow 2%, even with the worst drought in 40 years,” he said at the time.
“As a result, Zimbabwe is expecting a bumper wheat harvest, achieving self-sufficiency with an estimated 600,000 metric tons and plans to begin exporting wheat,” he added.
The finance minister revealed that the government intends to bolster agricultural insurance programs in 2025 to target the most disenfranchised communities in 22 affected districts.
