• Treasury mandates prior written approval for contracts exceeding US$2 million, limiting funding to high-impact projects, with unauthorized agreements declared void
• MDAs must use government facilities like ZIPAM for workshops and restrict foreign travel to externally funded trips
• However, exemptions for “strategic” workshops and “approved” vehicle purchases introduce potential loopholes.
• The circular imposes a hiring freeze, except for health, education, and security sectors, and defers property, furniture, and equipment purchases to 2026

Harare- Last week on the 24^th of September 2025, the Ministry of Finance issued Treasury Circular Number 10, directing all government ministries, departments, and agencies (MDAs) to implement strict expenditure controls to align with the 2025 Approved Budget and restore fiscal discipline. The circular outlines measures targeting high-value contracts, workshops, foreign travel, vehicle usage, hiring, and capital purchases, aiming to address unbudgeted spending that has strained Zimbabwe’s economy.

While these reforms signal a commitment to fiscal responsibility, their success remains uncertain when viewed against the government’s history of wasteful spending, often tied to political patronage, and the mixed outcomes of similar past policies. past spending patterns, including politically motivated expenditures to secure support.

“As part of fiscal consolidation measures and in order to ensure effective and efficient public spending, the following measures will guide public expenditure management with immediate effect,” The ministry of Finance, Economic Development and Investor Promotion said in a circular.

Historically, Zimbabwe’s government has faced challenges with unbudgeted spending, diverting resources from planned priorities and accumulating debts to contractors. The government owes millions for various infrastructure projects, impacting firms like Bitumen World, which has laid off workers, and Masimba Holdings, which has scaled back public sector engagements to mitigate financial risks.

Politically driven spending has also been a significant issue, particularly to garner support in rural and traditional communities. Ahead of the 2023 elections, the government allocated vehicles, agricultural inputs, and cash transfers to traditional leaders and rural constituencies, often outside budgetary frameworks.

Such expenditures, framed as development initiatives, have strained public finances. A notable example of fiscal overreach occurred in 2024, when the Council of Chiefs exceeded its annual budget by 118% by June, driven by the procurement of 237 vehicles.

The circular’s core measure requires Treasury’s prior written approval for contracts exceeding US$2 million, limited to projects that drive economic growth or mitigate risks to life. Contracts below this threshold must align with approved budgets, and unauthorized agreements will be deemed void, with no payments for unbudgeted costs.

This aims to prevent unplanned expenditures, but past efforts suggest challenges in implementation. A 2020 policy mandating Treasury oversight for large contracts was undermined when politically favoured projects secured exemptions or emergency funding.

Workshops and seminars, long associated with excessive spending, are another target. MDAs must now use government facilities like the Zimbabwe Institute of Public Administration and Management (ZIPAM) and select venues closer to participants to minimize travel and allowance costs. An exemption for “statutory or strategic planning workshops” introduces potential ambiguity.

Historically, similar reforms, such as a 2019 directive to curb workshop expenses, saw limited success when ministries reclassified routine meetings as “strategic” to access private venues like Victoria Falls, where officials received substantial per diems.

Foreign travel, a significant source of allowance-related expenditure, is restricted to externally funded trips, with special per-diem rates eliminated. Past spending in this area has been substantial, with a 2022 parliamentary report noting one ministry’s US$5 million expenditure on international travel, often for questionable “study tours.”

Previous restrictions, like those in 2021, were circumvented through donor-funded trips or budget reallocations, highlighting enforcement challenges. The circular’s lack of transparency about which department consumes the most travel funds, as recorded in the Blue Book, may hinder accountability, echoing past difficulties in controlling this expenditure.

Vehicle and hiring policies face similar scrutiny. The circular mandates a 25% fuel reduction, bans taking pool cars home, and prohibits new vehicle purchases, except for those “already approved and committed.” This exemption recalls the 2024 vehicle procurement by the Council of Chiefs, where unbudgeted purchases were retroactively justified, straining reserves.

The hiring freeze, exempting health, education, and security sectors, addresses public service bloat but risks exacerbating strain on underfunded sectors plagued by skills shortages. Past freezes, such as those in the late 2010s, failed to address low wages and poor conditions, leading to continued staff attrition. Deferring property, furniture, and equipment purchases to 2026 may preserve funds but risks repeating earlier deferrals that degraded infrastructure, such as neglected public facilities.

Therefore, Treasury Circular Number 10 of 2025 reflects a concerted effort to address Zimbabwe’s history of unbudgeted and politically motivated spending, but its parallels with past policies highlight potential vulnerabilities.

The government’s track record of fiscal overruns, exemplified by the 2024 Council of Chiefs overspending and election-driven patronage, reflects the challenge of enforcing discipline. Measures targeting contracts, workshops, travel, vehicles, and hiring address known areas of waste, but ambiguities and enforcement gaps, seen in prior initiatives, could limit their impact.

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