Zimbabwe left with just $US217 in the bank

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After paying civil servants Zimbabwe’s government has just $US217


Two hundred and seventeen US dollars. That is all that remains in the public  account of the Zimbabwean government, a bewildered finance minister has  announced.

The paltry amount cast doubt over claims of a slow economic recovery and  raised fresh questions about the fate of the country’s diamond revenues –  officials say almost $685 million worth were sold last year.

‘‘Last week when we paid civil servants there was $217 [left] in government  coffers,’’ Tendai Biti, the finance minster, told journalists in the capital,  Harare, on Tuesday, noting that some of them have healthier bank balances than  the state.

‘‘The government finances are in a paralysis state at the present moment. We  are failing to meet our targets.’’

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Zimbabwe’s elections agency has said it needs $104 million to organise polls  this year.

Biti added: ‘‘The government has no money for elections … We will be  approaching the international community to assist us in this regard, but it’s  important that government should also do something.’’

Zimbabwe’s economy boomed after independence in 1980 but took a hit in 1997  when the president, Robert Mugabe, gave in to pressure from war veterans waging  violent protests for pensions.

From 2000 the seizure of white-owned farms led to chaos in the agriculture  sector and the economy shrank by half. In 2008 hyperinflation of 231,000,000%  broke the national currency and left millions of people hungry.

But the adoption of the US dollar and South African rand appeared to have  brought a measure of stability.

The government’s national budget for this year stands at $3.8 billion and the  economy is projected to grow 5 per cent.

The headline figures are not necessarily reflected on the ground, however.  The UN has said Zimbabwe will require at least $131 million in aid this year,  the bulk for food assistance after a failed farming season left nearly 1.7  million people facing hunger.

‘‘There have been some assertions that the economy is getting better but as  ordinary people we have not been seeing it,’’ said McDonald Lewanika, director  of the Crisis in Zimbabwe Coalition.

‘‘Without foreign direct investment coming in and with some companies leaving  because of uncertainty, I wonder where these assertions come from.

‘‘The minister’s statement is indicative of the very difficult situation in  the country. It shows the economy really is in the intensive care unit. We have  a very small formal economy so the space where minister Biti can raise resources  is limited. And we should ask where certain revenues are going.’’

The Movement for Democratic Change claims that income from lucrative diamond  sales is being expropriated by 88-year-old Mugabe’s Zanu-PF party to boost its  campaign for votes. Biti, who is also MDC secretary general, has claimed the  treasury received only $40 million from diamonds last year.

The MDC spokesman Douglas Mwonzora said: ‘‘The government has no money. The  most important thing is that money from diamonds is not being remitted to  government coffers. As a result, after payments were made last week, there was  only $217 left.’’

He added: ‘‘The diamond wealth is going to Zanu-PF machinery and its war  chest. There is likely to be an economic crash because of the uncertainty of the  elections and the possibility of a Zanu-PF victory. Investors really have to  pray for an MDC victory.’’

The watchdog Partnership Africa Canada said last November that at least $2  billion of diamonds from the Marange fields had been stolen by Mugabe’s ruling  elite, international dealers and criminals in ‘‘perhaps the biggest single  plunder of diamonds the world has seen since Cecil Rhodes’’.

A referendum on a new constitution is set to be held in March after which  Mugabe is expected to name a date for the election. The latest draft of the  constitution curbs presidential powers and strengthens the cabinet and  parliament.

The new document also limits the president to two five-year terms, starting  from the next election. However, this will not be applied retrospectively, so  Mugabe, already in power for 32 years, could technically rule for another two  terms.

The Guardian

Read more: http://www.smh.com.au/world/zimbabwe-left-with-just-us217-in-the-bank-20130131-2dm53.html#ixzz2JYKK3YxI

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