Zimbabwe - Public finance





Zimbabwe derives its principal revenues from income taxes, sales tax, customs and excise duties, and interest, dividends, and profits. Principal categories of expenditure are education, defense, debt service, and agriculture. Budgets for the 1970s and the 1980s were generally in deficit. Escalating fiscal deficits in the 1980s led to the implementation early in 1991 of an extensive reform program, which focused on fiscal deficit reduction and monetary reforms. A severe drought in 1992, however, set back the program; the deficit rose to more than 10% of GDP in 1993, and 15% of GDP in 2000. In 1999, an estimated one-third of the total budget was spent on troops sent to the Congo. Pay rises from 60% up to 90% were given to the civil service and the army, and he gave himself an even bigger raise.

The US Central Intelligence Agency (CIA) estimates that in 2000 Zimbabwe's central government took in revenues of approximately $2.5 billion and had expenditures of $2.6 billion. Overall, the government registered a deficit of approximately $100 million. External debt totaled $5 billion.

The following table shows an itemized breakdown of government revenues and expenditures. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.

Zimbabwe

REVENUE AND GRANTS 100.0% 2,500
Tax revenue 86.5% 2,162
Non-tax revenue 10.0% 249
Capital revenue 2.1% 53
Grants 1.5% 37
EXPENDITURES 100.0% 2,600
General public services 5.1% 132
Defense 7.1% 184
Public order and safety 6.2% 160
Education 24.2% 629
Health 8.1% 211
Social security 18.2% 474
Housing and community amenities 4.4% 113
Recreation, cultural, and religious affairs 0.1% 2
Economic affairs and services 6.8% 176
Interest payments 19.9% 519

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