2022 Mid-Term Budget Review - Highlights

Finance and Economic Development Minister Mthuli Ncube on Thursday presented the 2022 Mid-Term Budget and Economic Review in Parliament. Here are the highlights:

• Reserve money stock has increased to ZW$33.6 billion as of 30th June 2022, largely due to growth in statutory reserves in line with the thrust of tightening monetary policy.
• The annual growth in broad money was largely driven by increases of 316.9% and 286% in credit to the private sector and net claims on Government, respectively.
• Zimbabwe’s balance of payments remains favourable with a current surplus of US$387.1 million having been registered during the first half of 2022.
• The gold coins are tradable, highly liquid and can be used as collateral security.
• Merchandise exports and imports increased by 33% and 15% to US$3 516.5 million and US$3 746.8 million, respectively, during the first half of 2022, compared to the same period in 2021.
• Exports are expected to reach US$7.3 billion, spurred by increases in mineral receipts benefitting from the mineral commodity price boom, as well as increases in agriculture and manufactured exports.
• 2022 National Budget was premised on revenue collections of ZWL$850.8 billion (16.8% of GDP), expenditures of ZWL$968.3 billion and a target budget deficit of ZWL$76.5 billion (1.5% of GDP). Unaudited outturn during the first half indicates revenue collections of ZWL$506.6 billion, against expenditures of ZWL$534.5 billion. This has resulted in a budget deficit of ZWL$27.9 billion, against a target deficit of ZWL$45 billion.
• As at end of June 2022, public and publicly guaranteed debt stood at ZWL$1.3 trillion and US$13.2 billion, comprised of domestic and external debt, respectively.
• Budget Transparency Performance, the country is doing well in terms of budget transparency and is now ranked 3 in Africa, after South Africa and Benin. Globally, the country is ranked 41 out of 120 countries according to the International Budget Partnership (IBP) latest Report.
• Revenue collections to year-end are now projected at ZW$1.7 trillion while expenditures are now estimated at ZWL$1.9 trillion. This is against the approved Budget of ZWL$968.3 billion, entailing additional spending of ZWL$929 billion.
• The bulk of the Supplementary Budget (53%) is going towards employment costs to cushion public servants against the increasing cost of living. The balance of additional resources are going towards meeting Government consumables (18%),capital projects (19%) & social benefits (7%).
• Tax-Free Threshold was increased to ZW$300,000 or USD1,200 per annum for remuneration earned in local and foreign currency, respectively, with effect from 1 January 2022.
• Tax Relief Measures, Threshold on local currency remuneration from ZW$300,000 to ZW$600,000 per annum and also adjust the tax bands to end at ZW$12 million from the current ZW$6,000,000 per annum, above which tax is levied at a rate of 40 percent, with effect from 1 August 2022.
• Bonus Tax Free Threshold: I also propose to review the local currency tax-free bonus threshold from ZW$100,000 to ZW$500,000 with effect from 1 November 2022.