Gaolathe and his technocrats are hammering out a tough 2025-26 budget, which is expected to carry an P11.4 billion deficit. The current financial year, which ends on March 31, is expected to show a shortfall of P18.6 billion, higher than even the COVID-19-hit year of 2020-21, which produced a P16.4 billion deficit. Speaking at a Budget Pitso held for Local Authorities on Friday, Gaolathe, who is also the Finance minister, said government’s focus was on prioritising its spending to both reduce expenditure and foster growth. “As we move forward, we need to recognise and prioritise fiscal consolidation plans that effectively support the broader goals of economic growth, diversification, sustainability and progress for all,” he told the gathering. “The core of this agenda is our determined efforts to rebuild our fiscal buffers and establish robust spending management and practices,” he noted.
Late in December, the Vice President told a youth Budget Pitso that going forward government would have to reduce the civil service wage bill and also cut grants and subventions to local authorities and parastatals, as a way of slowing down government spending and boosting savings. He also said government intended to boost domestic resource mobilisation efforts, an effort that usually includes broadening the tax base and tightening revenue collections, while also enhancing spending discipline and seeking new engines of economic growth.
