Economy in bad start: Biti

first six weeks of the year raising fears that if the trend continues Government might miss its annual revenue target of US$2,7 billion.
Minister Biti said this in his address to the third edition of the CEO Africa Roundtable in Nyanga last Friday.
He said the Zimbabwe Revenue Authority had only collected US$156 million against a target of US$252 million.
The minister said in January the revenue authority should have collected US$102 million but had only collected US$60 million.
With a national expenditure budget of US$2,7 billion Zimra should collect an average of US$232 million per month.
“The economy underperformed seriously in the first six weeks of the year. Our revenue collector only collected US$156 million against a target of US$252 million.
“As of last week they had collected only US$60 million for February,” he said.
Minister Biti said the Government was concerned with a situation where it has to live from hand to mouth and with no capacity to save revenue for any other critical social or economic investment programmes.
The development may put the Government under immense pressure in terms of the recurrent expenditure obligations it has to meet such as the huge civil servants’ wage bill.
The Government’s wage bill, said Minister Biti, had ballooned and now gobbled up more than 70 percent of national revenue. This also puts him under pressure from lowly paid State workers who were clamouring for a decent wage.
Minister Biti said apart from tax revenue the Government has not been able to get funding from any other source and that was why he did not make provisions for a vote of credit in his 2011 Budget.
He reiterated that he had not received as much from diamond sales as was reported to have been generated from the third sale of gems.
He said he only received US$42 million, despite reports that the diamond auction had generated US$174 million. He has since ordered an investigation into the matter.
Against this background Minister Biti said there was need for clearer shareholding and revenue or dividend distribution structures at the companies extracting diamonds in the Chiadzwa diamond fields in Marange.
State-owned Zimbabwe Mining Development Corporation has joined private sector partners for the extraction of alluvial diamonds in Marange.
He emphasised the need to also ensure local beneficiation of the diamonds from Chiadzwa for the country to get more from exploitation of the precious mineral.
This follows the paltry receipts the fiscus got from mineral exports last year. He said that of the US$1,8 billion realised from exports the fiscus got US$4 million in royalties.
He added that out of the US$600 million mineral exports in 2009 Treasury received virtually nothing.
Minister Biti said the private sector needed to play a more active role in the recovery of the economy as Government was cash strapped, although it had several multibillion-dollar projects to fund. For instance, he said the Government needed US$7 billion to fund irrigation programmes under the irrigation master plan crafted by the Ministry of Agriculture, Mechanisation and Irrigation Development, but the money was not there.
Minister Biti also pointed out that dualisation of major roads alone required a massive US$12 billion with the Chirundu-Beitbridge road alone needing a whopping US$1 billion while the Batoka Project also required US$2,5 billion, which Government presently had no capacity to mobilise.
In terms of funding critical infrastructure programmes Minister Biti said the answer lay in regional integration and promoting foreign direct investment through creating the right investment climate.