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City of Harare 2013 budget
City of Harare
October 25, 2012

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Introduction and Background

Your Worship, the presentation of these estimates is consistent with section 288 of the Urban Councils Act (Chapter 29.15), which requires that before the expiry of any financial year, the Finance Committee shall draw up and present for the approval of Council, estimates in such detail as the Council may require of the income and expenditure on revenue and capital accounts of the Council for the next succeeding financial year.

Your Worship, section 1C (1) of Part five (V) of Councils Standing Resolutions: Financial Regulations reads: "In October of each year, the Finance Committee shall submit to Council:

• A summary of the draft revenue estimates as amended in terms of paragraph (6) of Regulation 1B;
• A summary of the draft capital estimates as amended or otherwise in terms of paragraph (7) of Regulation (1), together with such detail thereof as will be published in the printed estimate book after approval by Council;
• A summary of the draft capital development plan and
• Its recommendations necessary for the approval and implementation of the annual estimates and the plan".

The presentation of the estimates is also in accordance with LOCAL GOVERNMENT CIRCULAR NUMBER 3 OF 2012, dated 8 June 2012, to all Town Clerks, Secretaries and Chief Executive Officers. The Circular urges Local Authorities to;

• Consult residents and other stakeholders;
• Comply with the Ministerial guideline of 30:70 employment cost to total recurrent budget ratio;
• Include a schedule of vital statistics;
• Integrate gender issues in the 2013 budget;
• Base the budget on the existing macro-economic fundamentals and
• Ensure that the budgets reach the Ministry by 30 November 2012.

Your Worship, Ordinarily, Councils' budgets are prepared and presented after finalization of the National Macro- Economic and Budget Framework from which they draw key guidelines. Oddly, the tradition is now the other way round. Councils' budgets are being presented before the National Budget.

Economic Review and Outlook

Your Worship, on Thursday 24 November 2011, the Minister of Finance, presented to Parliament, the 2012 Macro-Economic and Budget Framework. The Minister unveiled a four billion budget together with a number of measures and facilities targeted at leveraging the capacity of the country's productive sectors.

The 2012 National Budget sought to achieve the following objectives, among others:

• To consolidate macro-economic stability;
• To promote inclusive growth with jobs;
• To facilitate capital formation through both domestic and external investment;
• To promote the stability and role of the financial sector; and
• To increase investment in the social sectors of health and education.

The 2012 National Budget Framework further projected a 9.4% growth in Gross Domestic Product (GDP) while targeting year-on-year inflation at 5% by 31 December 2012.

The Minister of Finance, again, on 18 July 2012, presented to Parliament his 2012 Mid-Year Fiscal Policy Review whose thrust was about; "TURNING THE LONG WINTER OF DESPAIR INTO THE SUMMER OF GROWTH". He emphasized the need to eat what we kill, and live within our means.

In the Mid-Year Fiscal Policy Review, the growth projection in the GDP was reduced from 9.4% to 5.6% and annual budget was reviewed downwards from $4 billion to $3.6 billion. Inflation was re-affirmed at 5% by 31 December, 2012.

The economy is however, projected to grow by 8.9% next year on the back of improved macro-economic conditions.

Your Worship, Your Local Authority, as an arm of government, is not immune to the effects of the above challenges and developments.

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