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Zimbabwe Gov't Cuts Foreign Trips Spending to Save Ailing Economy

An emergency cabinet meeting called Thursday to discuss the state of Zimbabwe's economy resolved that government should immediately take measures to cut spending on foreign trips and put in place mechanisms to ensure money generated by ministries under President Robert Mugabe's Zanu PF arm of the coalition government is submitted to the treasury.

According to sources closely linked to the emergency meeting called by Mugabe, the cabinet also resolved that government has to find money to pay about 10,000 new army recruits and some civil servants hired recently by the Ministry of Defense and Public Service Commission without approval from Finance Minister Tendai Biti.

The sources said the ministries of transport and justice are among several others that have not been submitting revenues collected from the public. They have been asked to start channeling the funds to treasury for state use.

The cabinet further noted that since diamond collections have dwindled to unacceptable levels, there is need to deploy the Zimbabwe Revenue Authority in Manicaland province’s Marange diamond field to ensure transparency and accountability in the production and selling of diamonds.

State coffers are running empty due to liquidity challenges, especially as diamond revenues have failed to live up to expectations.

In the past five months, the government only collected $30 million from diamond proceeds instead of the projected $240 million while tax revenues have remained stagnant.

Economic commentator Bekithemba Mhlanga said the cabinet needs to stick to its decisions in order to curb unnecessary spending.

For further perspective VOA reporter Tatenda Gumbo spoke with independent economist Eric Bloch and Confederation of Zimbabwe Industries president Joseph Kanyekanye.

Kanyekanye said the emergency meeting was long overdue as the country is facing serious challenges like limited revenues, liquidity constraints and crippling power outages, closures of some commercial banks and tensions in the unity government worsened by pending general elections and the skewed indigenization program.