Mthuli Ncube budget statement a fraud, says Biti

FINANCE minister Mthuli Ncube’s 2020 budget statement is in a shambles with several errors and inconsistences in figures compared to those in the proposed estimates of expenditure (Blue Book), former Treasury boss Tendai Biti has revealed.

Biti has described the budget as “a fraud, feja feja and cooked up”, saying the glaring errors were shocking and gave the impression that Ncube was trying to hide something.

This is not the first time that Biti has torn into Ncube’s budget statement. Last year, the Harare East MP pointed out several inconsistences in the 2019 budget bordering on illegalities over currency change issues.

Soon after presenting the 2020 national budget statement, Ncube also came under fire from the Chinese government when he understated their 2019 aid to Zimbabwe.

In his budget presentation, Ncube said Zimbabwe received just US$3,6 million from China under the development partner support received through bilateral channels.

The Chinese government then reacted angrily, saying from January to September 2019, the actual bilateral support they provided to Zimbabwe was US$136,8 million.

Ncube had to apologise and also promised to rectify the issue.

On Thursday last week, Biti complained to Speaker of the National Assembly, Jacob Mudenda that the budget presented by Ncube was
riddled with errors.

“Mr Speaker, while the Blue Book has been tabled, it contains figures that are different from the budget statement, which makes the provision of the Appropriation Act important,” Biti said.

“I implore you to direct the esteemed Minister of Finance (Ncube) to present as a matter of urgency, and to table as a matter of urgency, the Finance Bill and the Appropriation Bill,” he said.

Biti then told NewsDay that there was inconsistency in the budget figure itself, with the Blue Book talking of a $68 billion budget and yet the anticipated revenue figure is $58,6 billion.

“I think he is actually working on a $68 billion budget and at the same time hoping to cover this up by a supplementary budget. We are in bigger trouble because according to the pre-budget revenue paper, the anticipated revenues were only $25 billion. So, this is a feja feja budget,” Biti said.

He said there was confusion and dishonesty in Ncube’s 2020 budget, especially pertaining to how issues of external and domestic loans were tabulated in the statement.

The MDC legislator said effectively, what it means is that there are three different 2020 budget figures.

“If you add up all the budget votes, they definitely will give you something different from the $68 billion figure in the Blue Book and the $58 billion figure in the budget statement. It means that we have three budget statements: One in the Blue Book, and the macro-economic framework which shows the anticipated $58 billion revenue, and if you add up the actual appropriations, I am certain that you will come up with a different figure,” he said.

Biti said all other previous Blue Books done by former Finance ministers, including himself, had five-year period totals of what had been spent, but since Ncube assumed his post as Finance minister, he was no longer tabulating the previous five years’ expenditure.

“What it means is that he is hiding figures so that people cannot do comparisons and they do not know what is really happening,” Biti said.

The Harare East legislator said the figures on total external loans were also put in Zimbabwean dollars, which did not make sense.

“The total external loans are $88 billion, but why put the figure in local currency when we know very well that external loans are in United States dollars? The Finance minister should have put the exchange rate that he used to come up with the $88 billion figure,” he said.

On the issue of external loans, Ncube’s budget said: “External debt stood at US$8 billion as at the end of September 30, 2019. The external arrears prevent the country from accessing new financing from the international financial institutions, traditional bilateral and commercial creditors.”

Biti said if the external debt, as stated in the 2020 budget statement, was US$8 billion, then Ncube should have stated how he converted it to come up with the $88 billion local currency figure — and mentioned whether he used the interbank market rate of 1:15 or “whatever rate he used”.

“So, what this clearly shows is that Ncube is cooking up figures because why put it in local currency when you do not disclose the exchange rate used?” Biti queried.

In the Blue Book, the external public guarantee debt is also tabulated as $63 billion, which is different from the $88 billion figure.

“The other issue is on the domestic debt, where it is listed as $1,3 billion in the Blue Book and yet in the budget, it is tabulated in a graph to confuse people with unclear figures. The whole thing is just a fraud,” Biti charged.

He said section 300(4) of the Constitution compels the Finance minister to: (a) “at least twice a year, report to Parliament on the performance of (i) loans raised by the State, and (ii) loans guaranteed by the State, at the same time as the estimates of revenue and expenditure are laid before the National Assembly in terms of section 305, and table in Parliament a comprehensive statement of the public debt of Zimbabwe.

“What it means is that twice a year, the Finance minister must give us a full list of debts, but he has not been doing that. On the project descriptions of the domestic debt, there is PTA Bank (Trade and Development Bank) and one wonders why it is listed as domestic debts,” Biti said.

“Therefore, the amount of chaos is alarming. The bottom line is that there is no credibility in Ncube’s figures and work. It is a feja feja economy and part of the problem is that we, as MPs, are so dull that we cannot see these things. But for a good planner and economists, we can pick this up and we now do not know what budget we are working on.”

Repeated efforts to get a comment from Ncube and Finance permanent secretary George Guvamatanga were fruitless as they did not pick up their phones.

Ncube is yet to respond to the concerns raised by Biti during debates of the Finance Bill and Appropriation Bill on the 2020 budget.

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