This statement is a response to an article published in The Sunday Standard of December 10, 2006 under the headline “Fresh Budget Blunder Disrupts Purchase of Presidential Jet ÔÇô Finance Committee report exposes errors in budgeting by the Ministry of Finance.”
This story is not correct in much respect. It has been observed that The Sunday Standard has, on several occasions, published information on budgets and economic issues without verifying the correctness of facts contained therein.
The correct facts are as stated hereunder.
Government took decision to purchase a Presidential Jet at an estimated cost of P314 million. A special Warrant for P240 million was issued, being the amount expected to be disbursed during the financial year 2006/2007.
According to Section 44 item 224 (c) of Finance and audit Act “if in any financial year it is found that a need has arisen to proceed with an approved project which has not been included in the estimates for the current financial year or that a need has arisen to proceed with a new project the President may direct the Minister responsible for Finance to issue a Special Warrant authorizing the issue of monies to meet such an expenditure.”
It is in this light that the Ministry issued a Special Warrant for P240 million for the project. The later advised by BDF that they would not need the entire amount but only P60 million as an installment for the current year.
Against this background, the Ministry would like to respond to specific issue as follows:
Issue: There is still a lot of money (over P500 million), which remains unutilized under the BDF development vote that could be used without having to ask for additional funds from Parliament.
Response: The Special Warrant issued for P250 million is part of the P500 million mentioned, but it had to be ratified in terms of Financial Instructions Number 224 (2) which states that “at the next meeting of the National Assembly following the issue of the Special Warrant, the Minister responsible for Finance will submit a supplementary to the National Assembly for its approval of the expenditure authorized by the Warrant or for the new, or revised estimated cost s the case may be”.
Therefore, the Special Warrant issued needed to be ratified by Parliament its next sitting to the extent of the amount payable which in this case is a revised amount of P60 million as shown in our supplementary request.
Issue: The blunders confirm allegations by MP Guma Moyo that assumptions always made by MFDP that projects for which they are requesting money are about to take off are almost always wrong.
Response: This statement is not correct. The foregoing clearly shows that MFDP did not make any blunders. We don’t know whether Mr. Guma Moyo is correctly reported.
Issue: The Committee has at least on two occasions, sent Ministry’s request back and instructed to follow the laid down procedures before Parliament could release the money requested.
Response: MFDP does not recall such occasions.
Issue: The Committee takes issue with the request for P8 million in respect of Serowe Stadium, reasoning that it does not make sense to ask for additional money when there is P25 million that remains unutilized at the Ministry of Labour.
Response: This statement is not correct. MFDP is requesting for a Total Estimated Cost (TEC) increase and not an Annual Provision to cover this expenditure. It should be noted that for any new or a component of a project which is not part of the Plan, Parliament approval has to be requested before bunds could be expended.
In this regard, the Serowe stadium is being reintroduced and only a TEC increase is being requested, taking into consideration that the Minister of Labour and Home Affairs has sufficient funds to accommodate any expenditure on the project during the current year.
We would appreciate it if The Sunday Standard journalists could desist from unnecessarily using emotive language and if they could endeavor to check their facts with the Ministry before making pronouncements to the public.
Duncan Mlazie
Assistant Minister of Finance and Development Planning
