01 Feb 2016

The 2016/17 national budget carries an estimated deficit of over P6 billion due to an expenditure of more than P54 billion against revenues of over P48 billion.

Presenting the 2016/2017  budget proposals to Parliament yesterday, the Minister of Finance and Development Planning, Mr Kenneth Matambo said the deficit, which stands at 3.8 per cent of the GDP, would be financed through a combination of drawing down on government savings, domestic borrowing and foreign borrowing, subject to their analysis.  

“In any event, this deficit, and any other future budget deficits, will be restricted to a ratio up to 4 per cent of GDP to avoid the country sliding into an unsustainable fiscal path,” the minister said.

Total revenues and grants for 2016/17 are estimated at P48.40 billion, a decrease of P3.36 billion compared to the revised budget of P51.76 billion for 2015/16 due to a projected fall of 6.9 per cent in mineral revenues and 23.8 per cent in customs and excise receipts.

Mineral revenue contributes 35.2 per cent of the total revenues, followed by Customs and Excise at 24.3 per cent. Non-Mineral Income Tax and Value Added Tax come third and fourth at 21.2 per cent and 12.4 per cent respectively.

The minister proposed about P37 billion for the recurrent budget and over P14 billion as development budget for the next financial year, saying the estimates were informed by the need to stimulate the economic growth and create job opportunities in line with the Economic Stimulus Programme (ESP) objectives.

Mr Matambo said the implementation of ESP would be done prudently to ensure continued fiscal sustainability.

“Special emphasis will be placed on the phased implementation of government programmes and projects, taking into account constrained fiscal space and available implementation capacity,” he said.

The finance minister said this called for strict discipline in utilising available public funds by ministries and departments.

“Furthermore, it means that implementation capacity and expenditure quality must improve significantly to yield the desired outcome, otherwise, less resources would be available for future economic activities,” he said. Ends