Zimbabwe’s government public accounts are now dangerously close to bankruptcy, warned its Finance Minister Tendai Biti on Tuesday, with the country set to approach international donors for cash in order to fund a constitutional referendum and elections expected to be held later this year.
"Last week when we paid civil servants there was just $217 [left] in government coffers," told Biti to journalists in Harare, according to AFP.
Zimbabwe’s public finances have been in freefall for close to a decade, thanks to hyperinflation and poor government policies in the past. Although the situation has stabilised over the past few years, with the country now using the U.S. dollar and the South African rand as official currency, the nation’s public finances remain a mess – especially with a low tax base, an underperforming economy and high public sector wages, which take up to 73 percent of the $3.8 billion national budget.
Additionally, reports last year suggested that at least $2 billion worth of diamond export revenues may have been stolen by corrupt officials and ministers over the last four years. Finance Minister Tendai Biti in the past has also accused mining companies of not remitting revenue to the government, claiming only $40 million, out of a possible $600 million last year, made its way into the central purse.
A top mining official however told AFP separately on Tuesday that the country was hoping to double its diamond exports this year from 8 million carats to 16.7 million, whilst denying Biti’s allegations.
“I don't know what the Finance minister will be saying but what I know is that diamond mining companies have always been paying 15 percent of the royalties to government," said Goodwills Masimirembwa, chairman of the state-owned Zimbabwe Mining Development Corporation.
"Last year, sanctions (against Zimbabwe trading companies) were biting. The U.S. threatened purchasers of Zimbabwe diamonds which resulted in low diamond sales in countries like India that normally buy from us," Masimirembwa added.