Treasury to approve government contracts exceeding US$2 million to curb over-contracting

THE government has tightened controls on ministries awarding large contracts, with Treasury now requiring prior approval for any deal worth more than US$2 million as it seeks to enforce fiscal discipline.

Finance Minister Mthuli Ncube announced the measure on the sidelines of the 2027 National Pre-Budget Seminar in Bulawayo, saying the new rules were designed to curb over-contracting by government ministries.

“We have put in some rules of the game to say that any contract above $2 million from any government ministry ought to be approved by Treasury, just to make sure that we stay within reasonable limits in terms of budgeting and we see value for money,” Ncube said in response to a question from the media.

He said ministries were beginning to comply with the new requirements, describing the development as encouraging.

Ncube warned that failure to demonstrate fiscal discipline and value for money could make it difficult for the government to seek additional financial support from Parliament.

“If we don’t do that, it becomes difficult to request further support from Parliament if our systems do not demonstrate that value for money and that spirit of living within our means. Remember this is taxpayers’ money,” he said.

On debt restructuring, Ncube declined to disclose figures but said a substantial portion of the country’s debt had been restructured, with March set as the deadline for completing the process.

The minister also defended the government’s cash-budgeting system, under which Treasury spends only what it collects, saying Zimbabwe could not rely on external borrowing because of its outstanding arrears.

“We don’t have the luxury of external resources to borrow to run our government. We build all our roads literally using our own cash. It’s only now, in the last few months, that we’ve been able to secure decent support even from the banking sector,” he said.

Ncube cited projects such as the Gweru-Kwekwe road and works by Terra Force as examples of developments being supported under the funding arrangements.

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