THE Foreign Affairs ministry’s 2023 budget was wiped out by rising inflation and a collapsing local currency, it has emerged.
Foreign Affairs and International Trade acting secretary Rofina Chikava yesterday told the Parliamentary Portfolio Committee on Foreign affairs led by Webster Shamu that the ministry bid for ZWL$110,3 billion for 2023, but was only allocated ZWL$81,8 billion, which was, however, eroded by inflation.
“The Foreign Affairs and International Trade was allocated ZWL$81 billion in the 2023 national budget. This budget was exhausted by mid-year/(June) due to movement in exchange rates and general increases in prices of goods and services,” Chikava said.
This has also increased pressure on the Zimdollar re-introduced by President Emmerson Mnangagwa in 2019 after a decade of dollarisation.
The local currency has, however, been on a free-fall as business push up prices of goods and services to hedge against losses.
Some businesses now completely shun the local currency, preferring the United States dollar.
Chikava said the ministry has not been spared the economic crisis.
“About 80% of the ministry’s budget is expended in US dollars,” Chikava said.
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“To date, Treasury has been allocating additional funding. As at September 30, 2023, the ministry’s revised budget stood at ZWL$187,5 billion, which is a 131% increase on the original budget of ZWL$81,864 billion. This variation can be attributed to depreciation of the Zimdollar.”
The local currency is trading just below ZWL$6 000 to US$1 using the official rate and about ZWL$8 000 on the black market.
“The current 2023 salaries budget was exhausted in May 2023 resulting in the ministry getting more funding,” Chikava said.
“Considering that the ministry has already spent ZWL$44,6 billion on employment costs as at September 30, the 2024 budget allocation of ZWL$155,5 billion will not be adequate to cater for the ministry’s requirements with the anticipated improvement in the conditions of service.”
The ministry submitted a proposed bid of more than one trillion for 2024.
