22 December 2012

Zimbabwe: I Can't Fund Polls, Biti Tells Principals

GOVERNMENT should seek alternative ways to fund the constitutional referendum and harmonised elections slated for early next year because the fiscus has no capacity to do so, Finance Minister Tendai Biti has said.

Addressing journalists on the state of the economy yesterday, Minister Biti said the biggest challenge for 2013 was finding resources for the two major events.

He said he had written to President Mugabe and Prime Minister Morgan Tsvangirai advising them of Treasury's position.

With a huge current account deficit, the minister said the country could turn to the international community and diamond mining resources to fund the processes.

Zimbabwe requires US$85 million for the constitutional referendum and an additional US$105 million for the elections that have to be held by June next year.

In the 2013 Budget, Minister Biti made a provision of US$50 million for elections, saying the balance would be drawn from "reserves".

"We have a huge current account deficit and since both processes are happening almost at the same time, I impressed upon them (principals) that our resources will not be sufficient."

On the total revenue of US$3,5 billion received between January and November this year, Minister Biti said this was within budgetary expectations which were likely to be surpassed after considering the US$401 million expected for December.

He said this was spurred by high expenditure expected over the festive period where income for value added tax would boost the coffers.

The Minister expressed concern over the US$43,7 million Treasury had received from diamonds up to November this year.

He said the revenue did not give a true picture of the state of the diamond industry in Zimbabwe and hoped for better pickings in the future with a projected income of US$20 million in December this year.

Of the US$310 million that was disbursed in November, Minister Biti said employment costs accounted for 64,2 percent at US$199,4 million after factoring in bonuses for civil servants while capital projects accounted for 4,7 percent (US$14,5 million).

Among notable projects funded were US$5,5 million for the construction of the Tokwe Mukosi Dam and upgrading of the Buffalo Range Airport for US$2,7 million.

Minister Biti said the country had experienced a bad agricultural season as deliveries to the Grain Marketing Board had tapered off with only 84 200 tonnes compared to 201 871 tonnes received in the same period last year.

Year-on-year inflation remained within reach as it stood at 2,99 percent in November after shedding 0,39 percent on the October rate of 3,38 percent.

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