Every ministry to get ‘a haircut’ as Treasury admits cash crunch

EVERY government ministry or department will have to take a budget cut to fit into the ZiG347 billion expenditure ceiling, Finance minister Mthuli Ncube has said, while admitting Treasury’s cash budgeting system has been failing to match releases with available resources.

Speaking at the closing ceremony of the 2027 National Pre-Budget Seminar in Bulawayo this Saturday, Ncube said ministries, departments and agencies (MDAs) submitted bids totalling ZiG974 billion, nearly three times what is available.

“We know we have an envelope. We know we have to live within it. And, of course, ministers will ask for more. Why not ask for more?” Ncube said.

“Everybody is going to be accommodated… there will be a haircut everywhere for everyone to fit into the $347 billion.”

Ncube said the government uses a cash budgeting system, meaning it spends what it collects.

“We use a cash budgeting system. We spend what we have. We live within our means.”

He acknowledged complaints raised by Parliamentarians during the seminar over late and erratic disbursements.

“Some of the issues around the amount of cash for disbursements, sometimes it’s a coordination issue, where budget releases have run too far ahead… pressure from the ministers releases run too far ahead of the need of cash to support those releases,” he said.

To address the anomaly, Ncube said government has strengthened its Cash Management Committee to forecast cash flows one to two weeks in advance to align releases with actual cash.

“We have an effective cash management committee whose job it is to focus cash flows first week, second week, two weeks in advance to align that with budget releases that we don’t over-promise through budget releases than under-delivery when it comes to actual cash receipt. So we’ll address that going forward,” he said.

He also warned that to stop accumulation of new domestic arrears, any project above US$2 million will now require Treasury concurrence.

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