Government Seeks $330 Million To Address Budget Shortfall

According to a recent Treasury report on public debt, the government is in discussions to secure external loans totaling $330 million to cover the budget deficit for the year 2024. Additionally, it plans to issue Treasury Bills and bonds amounting to $5.8 trillion to bridge the funding gap.

The budgetary shortfall is estimated at $9.2 trillion, with $4.3 trillion allocated to the budget deficit and $4.9 trillion earmarked for repaying and maturing government securities. Currently, the government is utilizing $40.8 million from existing loans from entities such as the Arab Bank for Economic Development in Africa, the International Fund for Agricultural Development (IFID), the OPEC Fund for International Development, and the Kuwait Fund.

To supplement these resources, the government is actively pursuing new loans, with negotiations underway for $100 million from Broughton Capital Group, $125 million from Dinosaur, and $105 million from ABSA and Standard Bank South Africa.

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In alignment with the anticipated economic growth of 3.5 percent in the coming year, total revenue collections for 2024 are projected to be $53.9 trillion, constituting 18.3 percent of the GDP. Tax revenue is estimated to contribute $51.2 trillion to this total, while expenditures are expected to reach $58.2 trillion.

The proposed expenditures for the next fiscal year prioritize safeguarding the purchasing power of civil servants’ incomes, ensuring the continuous provision of essential social services to vulnerable groups, and maintaining and rehabilitating government infrastructure. The government also aims to support ongoing public infrastructure projects, prevent the accumulation of arrears, and increase funding for capital projects through public-private partnerships (PPPs), as stated by Minister Ncube.

In the 2023 National Budget, there was an overall deficit of $336.8 billion, equivalent to 1.5 percent of the gross domestic product. The financing requirements for that year totaled $575.5 billion, encompassing the amortization of loans and government securities amounting to $248.6 billion.

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