23 January 2018
ZRP ‘Idiot’ Charamba loses cop insult case
Gukurahundi: Blame govt, not me – says ED
SA: Jazz legend Hugh Masekela dies
Cholera: Angry minister blasts city councils
Mzembi challenges arrest; quits politics
Mudzuri: Amnesty for MDC-T cop murder 3
Mnangagwa: Grace mentally unstable
ZESA gave Chivayo $7m, not $5m: Parly
Govt reduces excise duty on fuel
Filthy 5-Star hotels: Economy blamed
‘Am I African’ explores Zim's race conflict
Gafa’s Epworth concert draws thousands
Billiat might still leave: Sundowns coach
Katsande: Chiefs show championship mentality
Mnangagwa’s ‘New’ Zim merits support
Zhuwao: kleptocracy and EDiots in Davos
Mnangagwa off to Davos empty handed
Economy: the need for a paradigm shift
AfDB warns Zimbabwe to reduce recurrent expenditure
17/11/2014 00:00:00
by The Source
Warned about government wage bill ... Finance minister Patrick Chinamasa
Economy dominated by retail trade, Zimstat
50,000 jobs lost as 4,000 firms close
Toxic environment ruining economy, CEOs
Zimbabwe economy in tailspin: IMF
Poverty deepens as economic sinks, AAG

THE African Development Bank (AfDB) has warned Zimbabwe to invest in capital generating projects to halt economic slide and to reduce recurrent expenditure which chews up over 90 percent of its income.

Recurrent expenditure is money spent on goods and services, such as wages, which does not create fixed capital assets.

Capital expenditure, on the other hand, is payment for the creation and acquisition of fixed assets such as building infrastructure.

In its quarterly overview for Southern Africa, AfDB noted that the fiscal sector in Zimbabwe continues to be constrained by high recurrent expenditure requirements against limited revenue flows.

“With recurrent expenditures constituting about 96 percent of total expenditures, the importance of realigning the expenditure mix towards more growth enhancing capital expenditures cannot be overemphasised,” said AfDB.

Since the introduction of the multiple currency system in 2009, Zimbabwe’s bloated recurrent expenditure has met with calls by the International Monetary Fund for government to drastically reduce the civil service wage bill.

Statistics from Treasury show that government employment costs climbed to 81,5 percent this year from 68 percent in 2013.

AfDB also said there was need for Zimbabwe to attract foreign direct investments earmarked to improve government’s revenue and plug the widening current account deficit.

Zimbabwe’s trade deficit is seen widening this year, with the import bill seen reaching $8.3 billion from $7.6 billion in 2013, compared to exports of $5 billion this year and $4.43 billion achieved last year. The current account deficit for the first half of the year was at $1.77 billion.

“The sluggish performance of exports calls for measures to continue to improve the business environment to attract investment, boost productivity and competitiveness beyond the current levels,” said AfDB.


Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it






Face Book



comments powered by Disqus
RSS NewsTicker