Mthuli Ncube to redirect National Budget resources towards drought alleviation

By Staff Writer

THJE projected annual growth target is hovering under immense threates following the decision by Finance Minister Mthuli Ncube to redirect the 2024 National Budget resources towards the El Nino induced drought.

Ncube told a joint Parliamentary committee on Budget and Finance as well as Industry and Commerce that to feed the nation, Treasury was going to re-allocate funds from other sectors from the 2024 National Budget because borrowing would result in inflation in the long run.

The Treasury boss said no one anticipated the impact of the El-Nino-induced drought, hence the need for the resources to be reallocated from other sectors and put towards importing grain.

“We are expecting donations from financial institutions and international partners to support our fight against the drought.

“We did not know how deep the drought was and as such, we are going to use unallocated resources from other departments for the funds we need.

“The drought was unexpected and not even one of us here knew this was coming. The drought caused a 75% crop failure which is almost a total right off,” Ncube said.

Recently the Grain Millers Association of Zimbabwe (GMAZ) revealed that Zimbabwe was going to import grain from as far as Brazil, Mexico and Argentina.

The drought was declared a national disaster with President Emmerson Mnangagwa revealing that over $2 billion was needed for grain import.

Over 2,7 million people are food insecure and the government has extended a begging bowl to well-wishers.

The Finance minister promised to stick to the 2024 ZW$59 trillion national budget (already converted to ZiG) saying he would not issue a supplementary budget.

Citizens Coalition for Change (CCC) Harare West legislator Joanna Mamombe sought clarity on the Treasury’s financial preparedness for drought and how the new currency, ZiG, would be stabilised.

“What are the potential repercussions on the ZiG if the government diverts resources? Will the new ZiG continue to be stable?” asked Mamombe.

Responding, the Finance Minister said, “Re-allocation of the budget would not have an impact on the ZiG as the exchange rate and inflation would remain neutral.

“No budget deficit will be incurred and the government is expecting financial support. This will not be a major issue on the budget.

“We will stick to our 3.5% GDP growth forecast for now even though the drought impact could be so severe.”

Ncube also highlighted that besides reallocation of the budget, the government was expecting insurance payments, though inadequate, imports from millers as well as partners coming in to support the nation regarding the crisis.

“We insured this country against drought but it is not enough. We should think of broadening insurance. We did impartial insurance,” Ncube said.

He stated that the tight monetary policy regime adopted by the government to support currency stability had shown how “disciplined” the Treasury was.