Zim to miss economic growth targets: Biti

However, Minister Biti remained silent on information that some companies that wished to trade with Zimbabwe’s diamond producers had their money intercepted by the US.

Although Zimbabwe and the European Union are involved in talks to break a decade-long impasse, the US insists it will not remove sanctions on Zimbabwe.
Last year, Minister Biti said diamond dividends would reach US$600 million.
“Our failure to reverse the under performance of diamond dividends will ultimately affect implementation of the planned projects and programmes.

“Therefore, an enhanced effort in meeting diamond revenue targets becomes paramount, failure of which Government will have to revise the budget,” he said.
While other Government officials blamed poor diamond revenue inflows on sanctions, Minister Biti said this was due to lack of transparency.
The US imposed sanctions on Mbada Diamonds and Anjin Investments last year. Minister Biti said the Government’s recurrent expenditure is rising despite shrinking revenue.

The wage bill for civil servants accounted for about 70 percent of overall expenditure.
Agriculture was expected to grow 11,6 percent, but the decline in maize production had an impact on overall farm output. Maize output fell 33 percent to 968 000 tonnes from 1,4 million tonnes in the previous season.

Inflationary pressures are expected to mount, driven by rising food and fuel prices as well as wage pressures.
By year-end, it is projected to be 5 percent. Government had targeted an inflation rate of 4,5 percent this year.
Falling global demand for minerals due to the Eurozone crisis will affect GDP growth.

Last year, mineral exports accounted for 75 percent of exports.
Minister Biti said the Government had become “a major destabiliser” of the economy, as domestic debt had ballooned to US$300 million.

The Government is heavily indebted to various State enterprises and it owes Zesa more than US$70 million.
Minister Biti said inter-parastatal debt, at US$1,5 billion, was now a cause for concern.

The manufacturing sector registered modest growth, with capacity utilisation rising by four percent to an average 60 percent in the first quarter.
Zimbabwe continues to face energy shortfalls with challenges at Hwange Power Station largely contributing to erratic power supplies.