With $217 in bank, Zimbabwe, Well…”If Zimbabwe was a private company it would have closed down,” Zimbabwean finance minister Tendai Biti got it right this week. But, since Zimbabwe is a government, it instead will be floated by the IMF. The balance was reset to $30 million, but the finance minister stressed, this ship was definitely crashing. Regarding mainstream press coverage, He told the BBC: “You journalists are mischievous and malicious – the point I was making was that the Zimbabwean government doesn’t have the funds to finance the election, to finance the referendum,” he said. (Read more…)
Agence France Presse Finance reports that Minister Tendai Biti has told reporters in Harare today that $217 was the amount less after the government paid civil workers last week. ”The government finances are in paralysis state at the present moment,” he said, admitting: “We are failing to meet our targets.” Mainstream reports have shown that Zimbabwe has recovered from the deep hyperinflation experienced there, along with its new government. In a September IMF report, the country’s recovery is “moderating” after two years of growth. Officially, the country reported an average of 9.5% growth in 2010 and 2011, driven by mining exports and consumer demand.
“Despite better-than-expected revenue performance, central government operations recorded a cash deficit of 0.6 per cent of GDP in 2011 and domestic arrears accumulation of about 1 per cent of GDP, due mainly to two salary increases that raised employment costs by 22 per cent, crowding out social and capital investment,” the IMF said. ”The effect of the salary hikes was compounded in early-2012 by an increase in employee allowances and unbudgeted recruitment,” it added in its report.
“Fiscal pressures were exacerbated by significant underperformance of diamond revenues during the first half of 2012. In response to the fiscal slippages, in July the government announced expenditure and revenue measures, as well as a reassessment of diamond revenue flows. The measures include a hiring freeze, suspension of a number of diamond-revenue-financed projects, increases in excises on fuel, and enhanced monitoring of the mineral resources.”
[VIA Silver Vigilante]