Zimbabwe: 2016 Budget Fixed At $4 Billion

Zimbabwean Finance Minister Patrick Chinamasa presented the country's $4 billion 2016 budget Thursday, down from the 2015 allocation of $4.1 billion.



A key factor in the presentation was the government's wage bill, which stands at 82 percent of the total budget allocation.



Economic growth is slow, so that the government is counting on clearing its arrears of debt with the International Monetary fund (IMF), so that it can unlock new financing for development, Chinamasa said.



 Chinamasa said the country has put in place a strategy to clear arrears and fund development.   



For the time being, Zimbabwe is unable to borrow from the IMF, Chinamasa said. 



"It is envisaged that the settlement of external payment arrears by government to the tune of $1.8 billion owed to multilateral creditors would be completed in the first half of 2016. The debt arrears clearance program agreed to by the international finance Institution will go a long way to unlocking new financing for the country."



Realisation of the above strategy will depend on the successful completion of the current Staff Monitored Programme (SMP) with the IMF which will be reviewed sometime in February 2016, the minister said.



"The arrangement of bridge finance with regional and international banks is in place to clear the $601 million African Development Bank debt arrears. A medium- to long-term loan facility will clear the $1.1 billion arrears to the World Bank Group," Chinamasa explained.



 "Overall economic performance in 2015 indicates modest growth of 1.5 percent, backed by positive developments in tourism, construction and communication, with some setbacks in agriculture and mining. In 2016, Zimbabwe's GDP growth is projected to rebound to 2.7 percent, mainly through mining, tourism, construction and the financial sector," Chinamasa said. - Ankara