Finance Minister Biti Launches New Economic Blue Print

The 2009 budget revision to $1 billion from $1.7 billion was revealed as the country struggles with 90 percent unemployment, hyperinflation and shortages of basic goods.

Zimbabweans hope the government between President Robert Mugabe and Prime Minister Morgan Tsvangirai will halt a decline that Mugabe blames on Western sanctions but critics say was caused by his reckless policies.

In his budget revision speech, Finance Minister Tendai Biti said the government was unable to increase monthly allowances paid to civil servants from the current $100 — a move that would have helped build confidence in the new leadership.

"The outlook of our economic situation is still grim, but I have no doubt that we will be able to achieve the turnaround we require," he said.

Less revenue will mean the government will take longer to restore services, supply dilapidated hospitals with medical supplies, rebuild schools and improve the infrastructure.

Biti said Mugabe would launch a short-term economic recovery plan on Thursday, focusing on the humanitarian crisis and agriculture, manufacturing and mining.

It will also promote democratic, constitutional reforms and greater media and other freedoms demanded by Western powers crucial to Zimbabwe’s rebuilding.


Once prosperous Zimbabwe is in dire need of Western donors, who want the creation of a democratic government and economic reforms before pouring cash in.

Biti told parliament he would not be changing inflation and growth targets given in an initial budget drawn up before the power-sharing government was installed in February.

The initial budget forecasted 2 percent economic growth in 2009. Biti cut the 2009 budget revenue estimate to $1 billion from $1.7 billion, as well as spending by the same margin.

Biti said government revenue had come in at $25 million in February and $30 million in March, against projections of $140 million per month because taxes were low in an economy where unemployment is high and businesses have collapsed.

"We are embarking on the basic law of cash budgeting. No ministry or public agency or parastatal should expect to spend beyond what we have collected," said Biti.

Lawmaker Tapiwa Mashakada, deputy secretary general of Tsvangirai’s MDC, underlined the huge challenges facing the government in a speech to parliament.

"This budget is being presented at a time when the room to manoeuvre is very limited since there is no external budgetary support," he said.

"I just want to caution on the issue of a cash budget, which will continue to seize this government. My fear is that it’s cash in and cash out which, in practice, is not possible."