Treasury fails to meet revenue targets

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FINANCE Minister Tendai Biti admitted Monday that Treasury had failed to meet its revenues targets for the first quarter of the year adding growth forecasts for the year would also be tougher to achieve.
The government collected US$765 million, against a target of US$825 million. Diamond revenues amounted to about US$5 million against a US$15 million target, Biti said.
“The underperformance of revenues, against the background of high employment costs, some critical external loan repayment obligations, the referendum, elections and the unbudgeted for new requirements in support of grain importations, all pose major pressures on the Budget,” told reporters in Harare.
Biti said he was concerned about increasing expenditure pressures as the public service wage bill absorbed 75 percent of the total revenue generated, while US$51,6 million was disbursed for capital projects.
About US$51 million is required to import 150,000 tonnes of grain after a poor harvest. The government would provide US$5 million with private players making up the balance.
The country’s trade deficit also widened over the same period, with imports, at US$1,7 billion, outstripping exports at US$689 million from US$768,2 million in the same period last year. This translates to a trade gap of more than US$1 billion.
Minerals contributed the bulk of the exports at US$473,6 million. Platinum dominated mineral exports, with US$210 million, followed by gold at US$124 million and diamonds at US$113,7 million.
Biti also conceded that his 5 percent economic growth projection for this year would be tougher to achieve.
“Weaknesses in the economy are reflected through liquidity and financing challenges, limited revenue growth, as well as widening of the current account gap emanating from depressed exports and overdependence on imports,” he said.
“As a result, capacity utilisation of most productive sectors remains well below potential, dampening prospects of economic recovery.”Advertisement