Treasury’s fiscal balancing act . . . ZiG300bn revenue against ZiG600bn in requests

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GOVERNMENT faces a widening fiscal balancing act in the 2027 National Budget, with projected revenue of ZiG300 billion set against funding requests estimated at ZiG600 billion. Amid growing calls for Treasury to release approved allocations on time and in full, the pressure to sustain economic recovery is mounting.

The funding dilemma comes as Government prepares for an anticipated El Niño-induced drought while seeking to maintain investment in infrastructure, industrialisation and other productive sectors critical to economic growth.

Nowhere is the pressure on Treasury clearer than in the funding requirements submitted by the Parliamentary Portfolio Committee on Lands, Agriculture, Fisheries, Water and Rural Development. The committee reported that the Ministry of Agriculture had submitted a 2027 budget bid of ZiG254,85 billion against available resources of approximately ZiG21,215 billion, leaving a funding gap of ZiG233,41 billion.

The committee proposed increasing the ministry’s allocation to ZiG33 billion, arguing that additional resources would strengthen priority programmes and support progress towards the Maputo Declaration commitment to allocate at least 10 percent of public expenditure to agriculture. Its recommendations prioritise irrigation, agricultural extension services, mechanisation, land surveying and tenure documentation, alongside reductions in non-essential administrative spending.

If adopted, the proposed allocation would remain substantially below the ministry’s original bid, underlining the need to identify the interventions most likely to protect production and generate wider economic benefits. Agricultural funding also has implications for industrial development, given that reliable supplies of maize, oilseeds, livestock and other commodities support domestic processing, manufacturing employment and value addition.

The agriculture funding gap
Economists Ms Mary Chikonzi and Albert Dube said the funding mismatch highlighted the need for Treasury to adopt a more disciplined approach to public expenditure, prioritising programmes with the greatest economic and social returns.

Concerns raised at the ongoing 2027 Pre-Budget Seminar in Bulawayo have also exposed another challenge confronting the fiscal framework: the delayed and partial disbursement of approved allocations, which is undermining the implementation of programmes and limiting the impact of public investment.

Chairperson of the Parliamentary Portfolio Committee on Industry and Commerce, Mr Clemence Chiduwa, said failure to release budgeted funds was threatening gains made in manufacturing and other productive sectors.
“Capacity utilisation rose from 57.3 percent to 61.2 percent. Manufacturing contributes 16.2 percent of GDP, commerce 10.8 percent. Manufacturing investment exceeded US$2.5 billion. Value-added exports grew 60.7 percent. Fifteen anchor rural projects were facilitated. But releases are killing those gains,” he said.
Mr Chiduwa said the 2027 Budget should strengthen local production, reduce avoidable costs, protect fair competition and give businesses certainty to invest, employ and export. His concerns place expenditure prioritisation and implementation at the centre of the forthcoming fiscal framework, with Treasury expected to balance drought preparedness and food security against infrastructure development and industrial recovery.

Finance Minister Professor Mthuli Ncube told delegates at the pre-budget seminar that the scale of funding requests from ministries and other stakeholders exceeded available resources, making expenditure prioritisation unavoidable.
“The requests from this budget seminar far exceed the available envelope … the envelope is confined by some ratios, 18.1 percent of GDP, and their requests far exceed that, but that’s okay.
“Those requests should be made, so that’s okay, we understand, but we are limited by the size of the economy and our collection capacity,” he said.

Prof Ncube said Treasury expected to raise approximately ZiG300 billion in revenue next year, against requests estimated at double that amount.
“For next year, we expect to raise about ZiG300 billion in terms of what we can raise, but their requests are double that.
“So we are not able to actually meet that because we just wouldn’t have the revenue to meet double that figure,” he said.

The funding constraint places the 2027 Budget at the centre of a broader economic policy challenge: protecting vulnerable households against a potential drought while maintaining investment in infrastructure, water, energy and other productive sectors needed to support the country’s development ambitions.
The disbursement problem
Ms Chikonzi said the mismatch underscored the need for Treasury to distinguish between essential expenditure and programmes that could be deferred without undermining economic performance.
“Treasury cannot fund everything, so the priority should be to protect expenditure that has the greatest impact on economic growth, food security and livelihoods,” she said.

She said drought preparedness was critical, but Government should avoid a situation where emergency spending crowded out infrastructure and productive investment.
“While drought preparedness is critical, Government must avoid a situation where emergency spending crowds out infrastructure and productive investment.
“Irrigation, water infrastructure and agricultural financing should be prioritised because they help mitigate the effects of drought while strengthening the economy’s productive capacity,” she said.
Ms Chikonzi said the Budget should also focus on expenditure efficiency, eliminating non-essential spending and ensuring that resources allocated to ministries were directed towards programmes with measurable economic and social returns.

Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu backed calls for Treasury to fund and release approved allocations, noting that of the ZWG489.867 million allocated to the ministry for 2026, only 23 percent had been disbursed.
“We need predictable quarterly releases. If we allocate on paper and do not release, industry stays at 61 percent capacity,” he said.
Officially opening the pre-budget seminar, Speaker of Parliament Advocate Jacob Mudenda called on Parliament to strengthen oversight of public expenditure and establish whether approved funding was delivering intended services and development outcomes.
“Parliament must follow the money from the Treasury to the village clinic, the rural classroom and the community borehole and establish whether it delivered the service for which it was appropriated,” he said.

He also emphasised the importance of accountability before further resources are allocated.
“Prudence forbids entrusting fresh public resources to those who have failed to account for what they have already received,” he said.
Improved monitoring of expenditure and physical outputs would help ensure that allocations translate into functioning irrigation schemes, adequate grain reserves and timely assistance for vulnerable households.

The case for alternative financing
Economic analyst Albert Dube said the funding gap also underlined the need for Treasury to improve public expenditure management and explore alternative financing mechanisms for critical development projects.
“The fact that budget requests are almost double the projected revenue demonstrates the scale of the fiscal challenge facing Government.
“The solution cannot simply be to increase allocations, but to ensure that available resources are used efficiently and that spending is aligned with national development priorities,” he said.

Mr Dube said Treasury should prioritise projects that stimulate economic activity, create employment and generate additional revenue, particularly those supporting industry, agriculture, energy and transport.
“Infrastructure projects that support industry, agriculture, energy and transport are particularly important because they have multiplier effects across the economy,” he said.
He said Government should also strengthen public-private partnerships and mobilise development finance for projects capable of attracting private investment, while maintaining fiscal discipline and avoiding unsustainable borrowing.
“Equally important is the timely release of funds. An allocation that is not disbursed when required cannot deliver the intended economic benefits, particularly in agriculture, where the timing of inputs and irrigation investment is critical,” he said.

The competing expenditure demands come as Treasury seeks to maintain fiscal discipline and contain the budget deficit below three percent of gross domestic product. The 2026 Budget was projected to close with revenue collections of ZiG287.64 billion against expenditure of ZiG290.88 billion.

Economists said the revenue shortfall against funding requests also reinforced the need to explore alternative financing arrangements for infrastructure and productive investment. Public-private partnerships, development finance and private-sector participation could help ease pressure on the fiscus, particularly for projects capable of generating revenue or supporting commercial activity. However, such arrangements would require transparent procurement, appropriate risk-sharing and safeguards against creating unsustainable future Government liabilities.

Despite the anticipated climate-related pressures, infrastructure development remains central to Government’s strategy to improve competitiveness, crowd in private investment and support the transition towards an upper middle-income economy by 2030. Major projects include the Harare-Beitbridge and Bulawayo-Victoria Falls highways, as well as the Gwayi-Shangani and Kunzvi dams. Such investments have implications for transport efficiency, water security, industrial operations and the ability of businesses to expand production. However, their funding requirements must be weighed against immediate climate-response needs and other public-service obligations.

The 2027 National Budget will be guided by the National Development Strategy 2, which seeks to accelerate progress towards Vision 2030 while responding to prevailing economic realities.
“The 2027 National Budget will be guided by the NDS2 priorities, aimed at accelerating the country’s momentum towards the long-term developmental objectives in Vision 2030, while responding to current economic realities,” Prof Ncube said.

The central test for Treasury will be whether it can protect the economy against a potential drought while preserving investment in infrastructure and productive sectors. With revenue projected at ZiG300 billion against requests of about ZiG600 billion, the Budget will require disciplined prioritisation, predictable quarterly disbursements and stronger accountability to ensure that scarce public resources deliver the greatest economic and social returns.

Source: Treasury’s fiscal balancing act . . . ZiG300bn revenue against ZiG600bn in requests – herald

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