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Zimbabwe Economy Stutters, Records Low Revenue Inflows

Some Zimbabwean economists say it is not surprising that Zimbabwe is only left with a balance of $217 in its public account as parties in the unity government have failed since its formation in 2009 to craft policies promoting remarkable economic growth.

Reacting to remarks by Finance Minister Tendai Biti that the country’s coffers are almost empty, independent economist, Eric Bloch, told VOA Studio 7 that the country will fail to meet most of its financial obligations if its revenue inflows do not improve.

Mr. Bloch said to make matters worse, Zimbabwe does not have monetary reserves to tackle this finance crisis.

Another independent economist, John Robertson, said the finance crisis facing Zimbabwe would only come to an end when the country has a stable government.

Mr. Robertson also said indications are that revenue inflows have been low in January and would reach critical levels within the next few months if the government does not create a conducive environment in the country for running businesses.

TThe minister, who is now claiming that he made the revelation in order to emphasise that the government was unable to finance elections and not that it was insolvent, stunned journalists Tuesday when he announced that Zimbabwe has been left with only $217 in its public account after paying civil servants’ salaries last week.

According to Biti, the government finances are in a state of paralysis and Zimbabwe will fail to meet its targets including the funding of elections this year due to the current finance crisis.

He was reported last night as saying the following day after paying the workers' salaries, some $30 million of revenue had been paid into state coffers.

The Zimbabwe Electoral Commission says it needs $104 million for holding crucial polls this year.

The Zimbabwe Revenue Authority (ZIMRA) last week announced that it exceeded its revenue target in 2012 despite the slow pace of economic growth in Zimbabwe.

ZIMRA said net tax collections amounted to $3.3 billion against a target of $3.2 billion.

Value-added tax accounted for the largest chunk of tax collections followed by individual and company tax. Mining royalties brought in only $136 million. The gross tax inflows exceeded the 2011 target by 7 percent.

The country is expected to grow by at least 5 percent this year.