Economists demystify Condonation Bill

By Davison Vandira

ECONOMISTS say the gazetting of the Financial Adjustments Bill is above board as authorities are dealing with high inflationary pressures which have resulted in unauthorised expenditures in the last two years.

The recently gazetted Financial Adjustments Act of 2022 has been met with excitement at a time when the Ministry of Finance and Economic Development is seeking Parliamentary condonation for unauthorised expenditures in 2019 and 2020.

The period in question was characterised by high inflation which affected both the expenditure and the revenue sides, with ZIMRA consistently surpassing its target without the corresponding material effect.

It is in this context of the knock-off effect of inflation that economists have vindicated the government’s surplus position.

“The condonation that Treasury is seeking is above board and the unauthorised expenditure was caused by high inflation and affected both legs,” said Persistence Gwanyanya, RBZ Monetary Policy Committee member.

“The move by Treasury is just a fulfillment of constitutional provisions, which unfortunately has been mistaken by many people with respect to its effect,” said Kudakwashe Mugova, an economic analyst.

“The seeking of Parliamentary condonation by Treasury on budget overrun is a move to regularise what government did, however, with no effect to the finances of the government,” noted economist, Titus Mukove.

Zimbabwe’s revenue streams have been healthy for the past three years and the agreed position is that this has enabled government to fund massive infrastructure projects using local resources.

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