• Treasury seeks condonation for expenditure incurred between 2015 and 2018

• Spending in 2017 and 2018 accounts for 84.3% of the total

• The Bill revives a process first attempted in 2019, placing expenditure records and financing arrangements before Parliament

Harare - Finance Minister Mthuli Ncube is seeking retrospective parliamentary approval for US$9.64 billion in unauthorised expenditure incurred between 2015 and 2018 through Zimbabwe’s Financial Adjustments (No. 2) Bill, 2026. The proposed legislation uses Section 307 of the Constitution to seek condonation for spending that exceeded approved allocations or covered purposes without an appropriation.

Treasury records US$25.3 million for 2015, US$1.49 billion for 2016, US$4.56 billion for 2017 and US$3.56 billion for 2018. The expenditure has returned to the legislative process following a financial adjustments proposal published in 2019 and subsequently withdrawn.

The four annual amounts total US$9,638,602,782. Expenditure in 2017 and 2018 accounts for US$8.12 billion, concentrating 84.3% of the amount in two years.

Parliament’s examination needs to trace those amounts through the original appropriations, spending approvals, payments and audited accounts. The annual totals establish the scale of expenditure requiring condonation. Programme records would establish its purpose, financing and delivery outcomes.

An appropriation gives Government authority to spend a specified amount for a defined purpose. Spending beyond that authority creates a departure from Parliament’s allocation of public resources and requires an explanation of the decisions that produced it.

The supplied Bill identifies annual amounts attributable to the Ministry of Finance and sets out clauses for their condonation. It provides limited detail on the programmes financed, the recipients of payments and the reasons expenditure exceeded parliamentary authority.

Legislators therefore need supporting schedules connecting each amount to a budget vote, expenditure category and accounting record. Those schedules would allow scrutiny of whether the money financed completed projects, goods delivered, public services or obligations requiring further investigation.

Section 307 requires a condonation Bill to be introduced without delay and within sixty days after the extent of unauthorised expenditure has been established. Compliance depends on the date the amount was established and the subsequent legislative record.

The expenditure covered by the latest proposal dates back eight to eleven years. Treasury’s account of when the amounts were identified, verified and submitted for parliamentary consideration will establish the chronology against which its compliance can be assessed.

The earlier process provides part of that record. Veritas documented a Financial Adjustments Bill published in November 2019 covering expenditure from 2015 to 2018. Its legislative monitoring later recorded the withdrawal of that proposal.

Treasury needs to explain the withdrawal and reconcile the earlier figures with the amounts now submitted. A reconciliation would identify revisions, their accounting basis and the expenditure still requiring parliamentary condonation.

The original proposal also contained numerical discrepancies identified by Veritas. Agreement between the memorandum, operative clauses and audited schedules is necessary to establish precisely what Parliament would approve.

Budget execution affects the financing decisions of banks, suppliers and businesses. Government commitments create payment obligations, and obligations exceeding available cash can lead to borrowing, delayed settlement or reductions in other expenditure.

Suppliers fund labour, inventories and transport before receiving payment for many public contracts. Delayed settlement extends that operating cycle and can force businesses to borrow to meet their own obligations.

Interest charges then reduce margins and restrict the cash available for subsequent contracts. Suppliers expecting prolonged payment periods may incorporate financing costs into their bids, increasing the price Government pays for goods and services.

The Bill does not establish the extent of supplier arrears arising from the expenditure. Payment schedules and creditor reconciliations would show which obligations were settled, which remain outstanding and whether any financing costs continue to accumulate.

Borrowing arrangements also determine the economic consequences. Government borrowing from domestic banks increases banks’ sovereign exposure and can influence the resources available for private-sector lending.

Central-bank financing can expand liquidity and expose the currency market to additional pressure. The supplied legislation does not identify the financing mix, leaving those channels dependent on evidence from Treasury, borrowing records and central-bank accounts.

The US$9.64 billion represents historical expenditure submitted for condonation. Establishing its relationship with today’s public debt requires a separate reconciliation of borrowing, repayments and outstanding liabilities.

Adding the full amount to the current debt stock would risk counting obligations already recognised or settled. A financing schedule would allow Parliament to establish the portion funded from revenue, borrowing, accumulated arrears or other sources.

Public value also depends on expenditure outcomes. Completed infrastructure and services delivered can be assessed against their cost, procurement terms and intended beneficiaries.

Unsupported payments, incomplete projects and missing records require their own examination. Aggregate annual figures leave those outcomes unresolved, limiting the information available to judge whether taxpayers received value for the resources committed.

The legislative process should also establish how expenditure controls operated at the time. Commitment registers, cash-release approvals and supplementary budget requests would show where spending decisions moved beyond the available authority.

Current controls need to prevent agencies from entering contracts without sufficient appropriations and funding. Reconciliation of commitments with cash availability allows Treasury to identify pressure before suppliers deliver and liabilities accumulate.

Timely supplementary appropriations give Parliament an opportunity to examine additional spending requirements during budget execution. Prompt reporting of deviations preserves a record that can be tested against subsequent payments and audited results.

Fiscal disclosure feeds into Zimbabwe’s financing negotiations. Creditors assess the Government’s ability to identify obligations, control expenditure and service debt from future revenue.

Zimbabwe’s engagement with the International Monetary Fund seeks to establish a policy record supporting arrears clearance, debt restructuring and eventual access to external financing. A reconciled account of legacy expenditure would improve the information available to creditors assessing those objectives.

The parliamentary proceedings should produce Treasury’s explanation of the withdrawn 2019 proposal, a breakdown of expenditure purposes and a financing reconciliation. Any liabilities still outstanding would need to be incorporated consistently into published debt and arrears records.

Future budget reports will show whether expenditure controls are becoming more effective. Quarterly disclosure of commitments, payments, arrears and appropriation deviations would allow Parliament and creditors to assess fiscal performance before another condonation Bill becomes necessary.

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