By Business Reporter- The government has slashed funding for fuel allocations, foreign trips, and workshops for civil servants as the ZiG continues its freefall.

These austerity measures come amid the collapse of the Zimbabwean economy, characterised by decades of failed policies and rampant corruption.

The Zimbabwean dollar depreciated by a staggering 43% against the US dollar in September 2024, setting off a domino effect of economic challenges.

Treasury has since issued a directive to government departments, urging them to prioritise only essential expenditures for the remainder of the year, with limited non-wage budget support.

A circular dated November 13, sent to Permanent Secretaries and the Clerk of Parliament, warned of the grim fiscal outlook. 

Finance, Economic Development, and Investment Promotion Permanent Secretary George Guvamatanga highlighted the dire situation, citing the mismatch between delayed revenue inflows and immediate expenditure obligations.

“As you may be aware, the local currency unit (ZWL) recently depreciated by 43% against the United States dollar, resulting in a substantial mismatch between revenue inflows, collected in some cases with a one-month lag, and local currency expenditures that immediately adjusted to the new exchange rate,” said Guvamatanga.

He further noted that the government’s fiscal space had been severely constrained by a backdated civil service salary adjustment in October.

This has left the Treasury scrambling to fund critical obligations such as the 2024 bonus payments, food security programs, agricultural inputs for the upcoming farming season, and utility subsidies.

To contain expenditure, Treasury announced several measures for the remainder of 2024:

• Prioritisation of payments for outstanding obligations.
• Approval of foreign travel only if funded externally.
• Suspension of local workshops unless pre-approved by Treasury.
• A 50% reduction in fuel allocations for operational activities.

These measures, though necessary, underscore the government’s inability to manage its fiscal affairs—a problem compounded by Zimbabwe’s legacy of economic mismanagement.

Zimbabwe’s economic woes are deeply rooted in a history of failed policies and systemic corruption. 

The government’s erratic monetary policies, including the ill-fated return of the Zimbabwean dollar in 2019, have consistently undermined economic stability. 

Coupled with hyperinflation, unsustainable debt levels, and a culture of fiscal indiscipline, the country’s financial system remains on the brink of collapse.