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Without Diamond Revenues, Zimbabwe Gov't Programs In Jeopardy

Zimbabwe Finance Minister Tendai Biti said Thursday the country was failing to meet its budget revenue targets owing to lack of transparency in the marketing of Marange diamonds – a key component of the 2012 national budget.

Presenting his state of the economy address in Harare, Biti said lack of funds may force the government to suspend some of its capital projects and fail to pay civil servants.

He said the drying up of diamond revenues, subdued crop harvests, a rise in fuel prices and rentals will have an adverse effect on this year’s Gross Domestic Product projections.

Biti, who projected economic growth of 9.4 percent this year, said “… it’s foreseeable that major projections will be revised downwards”.

Revenues in the first three moths of this year were $771 million compared to a target of $870 million.

The finance minister said he suspected there was a parallel government clandestinely overseeing the marketing of Marange diamonds as treasury is not receiving revenues from diamond mining companies operating in the Chiadzwa area.

Biti accused one of the biggest mining companies operating in the Manicaland region, Anjin Investments, of not submitting any returns to treasury this year.

Reacting to Biti’s address, Masimba Kuchera of the Zimbabwe Coalition on Debt and Development said lack of accountability and transparency in the mining of diamonds in Marange will impact negatively on critical capital projects.

Meanwhile, the Zimbabwe National Statistics Agency (Zimstat), announced this week that the rise in the prices of alcoholic beverages, tobacco, utilities and rentals drove year-on-year inflation from 3.98 percent in March to 4.03 percent in April.

Zimstat said the month-on-month food and non-alcoholic beverages inflation fell from 0.80 percent in the same period to 0.14 percent while non-food inflation for the month of April fell to 0.21 from 0.26 percent in March.

Economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe said Zimstat figures did not take into account a lot of inflationary pressures.