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)
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

Syrian Rebels Poised for Anti-Russia Collaboration

Forty-one insurgent groups issue joint statement vowing retaliation for Russian air offensives More

Political Maneuver Revives Export-Import Bank's Chances

Parliamentary tactic gets bill out of committee, but it faces opposition in the Senate More

Beijing Warns US on S. China Sea Patrols

Warning follows news reports Thursday that US military is planning to sail warships close to artificial islands Beijing has been aggressively building More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
House Republicans in Chaos as Speaker Favorite Withdrawsi
Jim Malone
October 09, 2015 12:32 AM
The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video House Republicans in Chaos as Speaker Favorite Withdraws

The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video German, US Officials Investigate Volkswagen

German officials have taken steps to restore some of the reputation their car industry has lost after a recent Volkswagen diesel emissions scandal. Authorities have searched Volkswagen headquarters and other locations in an effort to identify the culprits in the creation of software that helps cheat on emission tests. Meanwhile, a group of lawmakers in Washington held a hearing to get to the bottom of the cheating strategy that was first discovered in the United States. Zlatica Hoke reports.

Video Why Are Gun Laws So Hard for Congress to Tackle?

Since taking office, President Barack Obama has spoken out or issued statements about 15 mass shootings. The most recent shooting, in which 10 people were killed at a community college, sparked outrage over the nation's gun laws. But changing those laws isn't as easy as many think. VOA's Carolyn Presutti reports.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

VOA Blogs