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Harare — THE inclusive government, looking for US$2 billion from the region and at least US$5 billion for economic recovery, desperately needs US$1 billion over and above its fiscal budgetary requirements to meet an array of emergency financial obligations.
Failure to secure the US$1 billion could cripple the operations of the new government that has raised public expectations on economic recovery and delivery of services, making its first 100 days a barren stretch.
Sadc finance ministers and African Development Bank officials met recently in Cape Town to work out a US$2 billion rescue package, but that is unlikely to come immediately. Sadc leaders need to meet first to approve the package.
A confidential internal government memo circulated to selected ministries says US$1 billion is needed now to meet emergency obligations which include critical payments for fuel, electricity, water, grain, seed, fertiliser, lines of credit, diplomatic missions, parastatals, currency printing equipment, the Registrar-General's office, presidential scholarships, security ministries, loans and debts.
The memo says as of last month, Zimbabwe owed Equatorial Guinea US$222 million for fuel, Noczim US$26,5 million, Noczim-pipeline US$4 million, lines of credit US$195,4 million, GMB US$106,05 million, corporate loans US$240,74 million, diplomatic missions US$30 million, fertilisers US$35,6 million, army/intelligence/police US$20 million, Air Zimbabwe US$10 million, Zinwa US$5 million, China US$5 million, the Registrar-General US$5 million, presidential scholarships US$4 million, Zesa US$40 million, seed US$12 million and currency printing US$100 million.
"This amounts to US$1,061,29 billion. Government needs to swiftly raise this money to keep running," the memo says. "Failure to pay some of these obligations urgently would further weaken the country's credit rating in regional and international markets."
The memo says government is facing a serious financial crisis and would need to move with speed to raise funds to save the situation. The crisis is aggravated by a total stock of external debt of over US$5 billion.
"The Ministry of Finance must swiftly put together a framework for sustainable external debt management," the memo says. "Government has been frustrated by the attitude of multilateral financial institutions and the donor community."
The need for emergency funding has created headaches for the new government which has no reliable source of revenue. Western nations have said no financial aid would be coming soon. The situation is further worsened by the global economic crisis gripping developed countries.
Only Australia, which does not belong to the G8, has promised US$10 million in aid over and above the humanitarian assistance to deal with water, sanitation and health services. However, US$10 million is a drop in the ocean given the needs.
With the International Monetary Fund, whose assessment team is currently in the country, indicating that no balance of payments support would be provided any time soon, Zimbabwe's bid to raise US$1 billion right away could be a nightmare.
To make the situation worse, government can no longer print money to meet its local obligations as the new Finance minister Tendai Biti is opposed to quasi-fiscal activities. The government used to meet its urgent financial obligations through printing money.
Now government will refrain from borrowing from the central bank either via direct overdrafts or through primary issuance of debt instruments to the Reserve Bank by the Treasury.
"Swift measures need to be taken to capacitate Zimra to raise fiscal revenues," the memo says. "Without this, we estimate that the expected target of achieving revenues that are 30% of GDP could turn out to be as low as 15-20% of GDP at best, which eventually would cripple operations of the government and the economy as a whole."
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Who in their right mind would believe that a billion dollars given to the Zimbo Zapus would ever reach the poor citizens for whom it was destined?? You'll be lucky to get enough to pay the light bill. The rest must be doled out those in need in the form of goods, not money. We may be generous, Obamma may be black, but, we're not stupid. Get rid of Mugabe or get used to it.
Get used to what?
And, who is "we"? You mean the thieves at Wall Street, whose generosity is painted in human suffering in the US?
We denounce representative democracy as contrary to the African Tradition. We condemn the political tradition of the West. A fortiori, we condemn its financial values.
And, what does Obama's skin color have to do with the price of tea in Kenya? Obama bailed out US corporations, mostly owned by "whites." Heck, he bailed out "white" thieves in the banks. So, Obama is a moment in an institutional structure we denounce.
When China buys worthless US Treasuries, does the US distribute the money to the starving millions in California, New York and Washington, DC?
Generous? The West has never been generous: it is the apotheosis of greed and fear. Capitalism without a human face.
richerson88 you are the one who has made the issue a color issue b/c you hate whites and just read your comments before you start denying what you truly believe. Sorry there are man successful black businessmen in the states as well as actors, sports starts, etc.... so once again you trip over your own feet. It is better to say nothing b/c with every word you write the easier it is not to believe you.
As to the millions starving in New York City, Washington D.C. and California well you for sure are way off with that one I think you were thinking about Zimbabwe. Again your opinion is useless so unless you have facts you have seen with your own eyes just say nothing more. You have defeated yourself with your own words..... I hope no one is paying you for this!!!
Color? We don't don't subscribe to the racialization of the human species.
Color, my foot. There are human bodies; your addition of 'color' to the human body is a POLITICAL DECISION, refuted by by science.
We have never called THE INVADERS 'WHITE', rather they call themselves "white" to justify their perfidy: the dehumanization of human bodies they choose to call "black."
Accordingly, it is pure nonsense to hang the shingle of color on our house of anti-color talk.
Races don't exist. Or, are you wiser than biologists?
richerson88 regardless of your worthless comments color exists here in Africa trust me all over Southern African I hear the names refer to me by so do not give me that bull and you say we dot do this just b/c you do not say it does not mean you do not believe it... Trust me I have read the words of you and your very few buddies here and it clearly shows you are racist and have an extreme hatred for whites. It is good to know that not all Africans think like you and others but you do look at a color of a person's skin here and make assumptions about that person....
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