Nginya Mungai Lenneiye, WB country representative on Monday [last week] told delegates attending a budget consultative meeting between government and development partners that treasury could face problems in writing a fiscal policy statement. Biti is later this month expected to announce a US$2 billion budget and a 6,4% GDP growth as government continues to operate under a narrow fiscal space due to lack of significant lines of credit from multilateral lenders and limited foreign direct investment.
"In drawing the 2011 budget, the Finance ministry continues to be faced by two types of challenges," Lenneiye said. "First those that lie outside budget instruments like limitations associated with political reforms and low implementation capacities in government. Secondly, those that the budget can address -- for example -- reducing opportunities for arbitrage in the economy, tackling unemployment through economic growth, supporting the recovery of human capacity, and improving budget management."
