Zimbabwean Finance Minister Tendai Biti’s proposal to fund an economic recovery with mineral revenues he says can be increased by forcing companies to work claims or lose them is meeting with skepticism from economists.
Biti said royalties on precious minerals will be raised to 4 percent of market value from 3.5 previously as of October. But economists said revised mining laws won’t do much to improve economic fundamentals.
Harare-based economist John Robertson told VOA Studio 7 reporter Gibbs Dube that Biti's proposals do not address most of the factors that leveled a once-strong economy over the past decade.
“The minister is not attending to the causes of the economic downturn such as the violation of human and property rights and political upheavals between two of the country’s main parties,” said Robertson.
Economic commentator Rejoice Ngwenya said the refashioned economic strategy will be hard to implement because the Zimbabwean economy at this point is cash-based with significant shortages of liquidity.
Biti offered a downbeat take on the economy in his mid-year review speech to Parliament on Wednesday, projecting slower growth than hoped for with less funding than hoped for coming from the international community.
He said he will look to the mining sector to boost revenues, but said the government cannot afford to raise salaries of civil servants who have been clamoring for an increase.
For perspective on the economic challenges facing Biti, Studio 7 turned to Callisto Jokonya, former president of the Confederation of Zimbabwe Industries, and analyst Masimba Kuchera of the Zimbabwe Coalition on Debt and Development. Kuchera said Harare must get the politics right to achieve sustainable economic growth.