15 February 2013

Zimbabwe: Cash Squeeze Scuttles Election Plan

GOVERNMENT is not ready to stage national elections anytime soon due to the precarious state of its finances which has forced President Robert Mugabe and his archrival, Prime Minister (PM) Morgan Tsvangirai, to assign their lieutenants to scrounge for donor funding, cap in hand, in order to bankroll both the referendum and the harmonised elections.

Treasury requires an estimated US$250 million to run both the referendum and the harmonised elections which would terminate the drama-filled life of the inclusive government formed in February 2009 to end intense contestation for power between bitter rivals, ZANU-PF and the Movement for Democratic Change formation led by PM Tsvangirai.

Because of the acute revenue constraints spawned by the poor economic performance and the bickering in the unity government which unnerved domestic and foreign investors, Treasury has been unable to fund both elections.

In its 2013 National Budget, Treasury allocated a paltry US$25 million towards the elections, more of a token signifying its commitment.

Government has also been unable to award salary increases for its embattled employees, causing relations to deteriorate in the civil service.

Government workers have since threatened to sabotage the elections unless they are awarded a reasonable salary increase that would lift income for the lowest paid worker to levels consistent with the poverty datum line, estimated at about US$550.

Finance Minister Tendai Biti was recently quoted saying only US$217 was in State coffers, only to make a U-turn after the story triggered a storm.

So tenuous is the financial crisis in government that President Mugabe has begrudgingly authorised one of his top legal minds to court donors despite his strong opposition to donor funding which normally comes with strings attached.

The extent to which the cash squeeze has affected the country's electoral processes has come as a rude awakening to principals in the Government of National Unity, particularly President Mugabe who wants elections to be held without further delay.

Government is now pinning its hopes on the United Nations Development Programme (UNDP) to mobilise funding for the elections.

But that option might take some time to materialise considering the global financial crisis that has caused the donor community to stiffen its hand. Government was also late in extending its begging bowl to the UNDP, which has been the major funder of the constitution-making process, now in its final stages.

In the event that the fund-raising initiative fails, government would be forced to reallocate resources in its 2013 national budget to prioritise the elections and avoid a constitutional crisis.

But with line ministries already on the threshold of exhausting their votes, further budgetary cuts could worsen service delivery.

While constitutionally, Zimbabweans should go to the polls by June 29, the electoral processes lag far much behind due to the bickering in the inclusive government.

A referendum for the new constitution will now be held on March 16 although it is not yet clear whether or not the government has secured the resources to fund it.

Thereafter, the country might go to the polls but only after they have dealt with issues arising from the new charter. Funding would also be a key component of this jigsaw puzzle.

President Mugabe has since cleared the way for Justice and Legal Affairs Minister Patrick Chinamasa and Biti to mobilise resources for the polls outside government coffers.

On Monday last week, Biti and Chinamasa jointly wrote to UNDP resident representative, Alain Noudehou, requesting funding for the referendum and the general elections.

They said government's poor financial situation and "short space of time" made it impossible to fully finance the "two important national programmes more so in view of the cash-flow constraints we are facing during the first quarter of the year."

"In view of the above, on behalf of the government of Zimbabwe, we formally request the UNDP for assistance in mobilising resources to carter for the funding gap for both the constitutional referendum and the general elections. We trust that this letter will facilitate initial discussions between government and the development partner community. Further it is our hope that a formal structure in respect of the referendum and the elections between yourselves and the government be set-up similar to the Project Board that dealt with the constitution-making process," reads part of the letter.

They added that they hoped the development partners' financial support would enable Zimbabweans to freely express their views during the referendum and general elections.

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