ZiG Currency Delays Disbursement Of Government Funds
The Minister of Finance, Economic Development and Investment Promotion Mthuli Ncube says the disbursement of funds by the Treasury allocated under the 2024 National Budget has been delayed due to the introduction of the Zimbabwe Gold (ZiG) currency.
ZiG was launched last by Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu when he presented the monetary policy statement.
Appearing before the joint Parliamentary Portfolio Committee on Budget and Finance and Industry and Commerce on Monday, Ncube said the Treasury had to reprocess documents to reflect ZiG currency instead of RTGS. Said Ncube (via NewsDay):
The delay in budget release and cash release has been in the past, but I have ordered that the system be changed and be driven by cash flow.
The introduction of ZiG will delay the release because we had a budget announcement denominated in RTGS [real-time gross settlement] and in April this year we announced the ZiG in the middle of the month.
Because of the documentation and balance processes that were ready, we could not release funds because of changing to ZiG.
This ZiG introduction has delayed disbursements of funds, but I have been assured that they are changing it.
At the time of presenting the budget last year, the exchange rate was going up and also when the ZiG was introduced, the exchange rate had ballooned.
So clearly there was an erosion of the budget, but the exchange rate and inflation also cut both ways, when the exchange rate was weakening the inflation was going up, and revenues were also increasing.
Ncube also said he will introduce a ZiG budget next month, adding that there was no need for a supplementary budget.
A supplementary budget is a request by government departments and agencies for additional funding during a financial year. It serves to cover expenses that were not initially included in the original budget.
It often involves borrowing or reallocating funds from other sources, which can affect the overall debt situation.
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