eBusiness Weekly
Enacy Mapakame
Zimbabwe still has long way to go in enhancing fiscal performance and transparency in order to speed up economic recovery and transformation, the Zimbabwe Economic Policy Analysis and Research Unit (ZEPARU) has said.
Fiscal transparency refers to the publication of critical information on how governments raise, spend and manage public resources. It looks at how governments raise taxes, borrow, spend and invest as well as manage public assets and liabilities.
In its report titled ‘‘Fiscal Performance and Transparency in the Budget Formulation and Implementation Process in Zimbabwe’’, ZEPARU has highlighted the shortcomings in the country’s fiscal processes that still need to be addressed to achieve total transformation in line with Vision 2030 of becoming an upper-middle-class economy.
Timely release of financial performance by state enterprises and parastatals, line ministries and Government departments are crucial. These should be done monthly, quarterly and annually to show trends in Government revenue and expenditure.
However, this is contrary to practice on the ground as shown by the Auditor General’s 2016 report which highlighted abuse and mismanagement of public resources and failure to maintain up to date financial statements.
According to ZEPARU, fiscal transparency helps in providing a sense of fiscal credibility and plays a major role on how financial markets view the country’s fiscal track record.
“Zimbabwe still requires a lot to be done to enhance fiscal performance and transparency to speed up economic recovery and transformation,” said ZEPARU.
The International Monetary Fund (IMF) notes that the degree of fiscal transparency is an important indicator of a country’s credibility and performance.
According to the 2017 Open Budget Survey, Zimbabwe is ranked 23 out of 100 on the Open Budget Transparency Index.
ZEPARU said this indicates that “Government is not providing enough information with regards to its expenditure and revenue by including expenditure by functional classification and individual sources of taxes and non-tax revenue.”
But the Transnational Stabilisation Programme (TSP) provides an array of fiscal reforms that Government intend to implement to promote economic stability, instill fiscal discipline which should translate to enhanced fiscal performance and transparency.
These are meant to enhance the ease of doing business, competitiveness of the Zimbabwean economy and mobilisation resources to finance social programmes.
Finance and Economic Development Minister Professor Mthuli Ncube, has also emphasised Government’s commitment to implement fiscal measures in a bid to improve the economy and bring down inflation to single digit.
The measures include reducing wasteful expenditure as well as narrow the trade deficit, which according to the Zimbabwe National Statistic Agency (Zimstats) was at $2,4 billion as of December 31, 2018.
ZEPARU, however, acknowledged Zimbabwe follows a sound budget formulation process guided by the Constitution fulfilling the IMF’s Fiscal Transparency Code of 2014.
This requires that national budgets and their underlying fiscal forecasts should provide a clear statement of government’s budgetary objectives, policy intentions and finances.
“The budget incorporates estimates of gross tax and non-tax revenues,” said ZEPARU.
