News / Africa

Zimbabwe Needs Loans to Revive Economy, Finance Minister Says

Zimbabwe's Finance Minister Tendai Biti  (File)Zimbabwe's Finance Minister Tendai Biti (File)
x
Zimbabwe's Finance Minister Tendai Biti  (File)
Zimbabwe's Finance Minister Tendai Biti (File)
Zimbabwe's economy is growing but has yet to recover from the catastrophic collapse it suffered in the decade prior to 2009.  This week the country's finance minister said he will seek loans from neighboring countries in hopes of meeting some urgent needs and getting the economy moving at a higher gear.  
 
Some say diamonds glitter, but that shine seems to be failing in Zimbabwe.

“I regret to advise that the economy remains depressed irrespective of the prevailing stable macroeconomic environment and some output improvements in such sectors as mining," said Biti.

That is almost the norm for Zimbabwean Finance Minister Tendai Biti when he opens his monthly addresses to journalists.  

He mentions mining, which many thought would anchor Zimbabwe’s economy after the collapse of the country’s once vibrant agriculture sector.   Diamond prices remain high on the world market and Zimbabwe has diamond fields estimated to be bigger than the size of Wales in Britain.  

But as Biti has noted in the past, little revenue from diamond sales reaches the national treasury.  He accuses President Robert Mugabe's ZANU-PF party, which controls the Marange diamond fields, of withholding diamond revenue in preparation for future elections.

Independent economic analyst Paradzai Paradza, a former lecturer at the University of Zimbabwe,  says that move is holding back Zimbabwe's recovery.

“It is actually a stand-alone case in the whole world because we have seen diamonds are rejuvenating economic growth in some countries. We have Angola, we have Botswana, we have countries like DRC who have transformed themselves into vibrant economies through diamonds. But in the case of Zimbabwe, the situation is not like that. I don’t think companies at Marange are not remitting the proceeds. I think they are remitting the proceeds, but the problem is who is getting the proceeds after they are remitted," said Paradza.

The news is not all gloom for Zimbabwe's economy.  Since the formation of a power-sharing government in 2009, after a disputed election, the country has registered annual growth of about 8 percent.

But because of the shortfall in revenue, Biti says, regional countries will have to chip in to help his country through this year.  He says Zimbabwe needs $400 million to mitigate drought effects, to raise money for by-elections and for a constitutional referendum, among other urgent needs.

Biti told reporters he has stepped up efforts to ensure that diamond revenue reaches the treasury.  He also plans to appeal to Zimbabwe's neighbors in the Southern African Development Community.

“The second thing that we are also doing is appealing to our colleagues in the SADC countries," he said. "I have just come from South Africa where I secured an important appointment two weeks from now with the South African minister of finance. In this meeting we are going to make a request for budgetary support to the tune of $100 million from the South African government."

He says he wants the South African government to honor a pledge of a $60 million line of credit it made in 2009.  From Pretoria he heads to Angola asking for a $50 million line of credit.  Earlier this week Botswana extended a $70 million line of credit to Zimbabwe to revive its ailing industries.

Zimbabwe cannot get loans from international lenders such as the World Bank until it has retired its current debt of about $10 billion.

The country cannot continue on its current course, Biti warned.

“We are eating that which we are not killing. We are killing a rat and consuming an elephant. That is not sustainable," said Biti.

Wages for government workers consume about 70 percent of the treasury's revenue.

Biti hopes that when the board of the International Monetary Fund meets in two weeks time it approves a deal to retire Zimbabwe’s international debt.

You May Like

Turkey: No Ransom Paid for Release of Hostages Held by IS Militants

President Erdogan hails release of hostages as diplomatic success but declines to be drawn on whether their release freed Ankara's hand to take more active stance against insurgents More

Audio Sierra Leone Ends Ebola Lockdown

Health ministry says it has reached 75 percent of its target of visiting 1.5 million homes to locate infected, educate population about virus More

US Pivot to Asia Demands Delicate Balancing Act

As the tumult in the Middle East distracts Obama, shifting American focus eastward appears threatened More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Natural Gas Export Plan Divides Maryland Towni
X
Deborah Block
September 21, 2014 2:12 PM
A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Alibaba Shares Soar in First Day of Trading

China's biggest online retailer hit the market Friday -- with its share price soaring on the New York Stock Exchange. The shares were priced at $68, but trading stalled at the opening, as sellers held onto their shares, waiting for buyers to bid up the price. More on the world's biggest initial public offering from VOA’s Bernard Shusman in New York.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid