Zimbabwe begs SA, Angola for US$150m


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ZIMBABWE – Zimbabwe has appealed for money from rich neighbour South Africa and oil-rich Angola to meet fiscal and other macro-economic obligations, the Finance minister has said.

Minister Tendai Biti said failure to attract aid from Western donors and foreign direct investment has formented an already dire financial situation.

Biti said the economy remains depressed, with funding challenges for both the private and public sectors, irrespective of the prevailing stable macroeconomic environment and some output improvements in sectors such as mining.

“I have secured an important appointment with South Africa’s minister of finance two weeks from now,” he told a news conference. “In this meeting we are going to make a request for budgetary support to the tune of $100 million.” He said the money was pledged by Pretoria after formation of the GNU in 2009.

Zimbabwe is also taking its begging bowl to Angola for a $50 million credit line. Biti ruled out bonuses for government workers saying he could not raise an extra $150million to bankroll the 13th cheque requred for the 240,000-strong civil service given the current cash inflow constraints. On the positive side, inflation for July and August remained contained at around 4percent, which is below the annual average target of 5percent.

The minister said public finances, however, had revenue performance challenges. In July and August, collections were US$257.4 million and about US$269.2 million against revised targets of US$271.2 million and US$280.7 million.

“This revenue under-performance implies underfunding of some planned budget projects and programmes,” Biti said.

In the financial sector, deposits grew by 3percent from US$3.59 billion in June to US$3.64 billion by July 2012. However, liquidity remained a challenge against high demand for affordable credit. Lending increased from 80percent in June to about 87percent of total deposits, but remained primarily short-term with lending rates still high ranging up to 30percent, he told reporters at his New Government Complex offices.

“Exports and imports maintained an upward trend, cumulatively reaching US$2.16 billion and US$5.1 billion respectively by end of August 2012,” he said. “This gives a half year trade gap of about US$3 billion, reflecting faster imports growth during the period under review.”

Biti outlined the major challenges still gripping the economy as revenue underperformance; consequent underfunding of various urgent government programmes such as agriculture, infrastructure, census and other social services; lack of liquidity, constraining banks to adequately fund productive sectors; low foreign investment hence Low capacity utilisation and high levels of employment; the continued high debt overhang blocking any new financing. Zimbabwe has an external debt of $9.1billion.

He said perceived uncertainties and delays over the Constitution making process was another challenge.Zimbabwe has appealed for money from rich neighbour South Africa and oil-rich Angola to meet fiscal and other macro-economic obligations, the Finance minister has said.

Minister Tendai Biti said failure to attract aid from Western donors and foreign direct investment has formented an already dire financial situation.

Biti said the economy remains depressed, with funding challenges for both the private and public sectors, irrespective of the prevailing stable macroeconomic environment and some output improvements in sectors such as mining.

“I have secured an important appointment with South Africa’s minister of finance two weeks from now,” he told a news conference. “In this meeting we are going to make a request for budgetary support to the tune of $100 million.”

He said the money was pledged by Pretoria after formation of the GNU in 2009. Zimbabwe is also taking its begging bowl to Angola for a $50 million credit line.

Biti ruled out bonuses for government workers saying he could not raise an extra $150million to bankroll the 13th cheque requred for the 240,000-strong civil service given the current cash inflow constraints. On the positive side, inflation for July and August remained contained at around 4percent, which is below the annual average target of 5percent.

The minister said public finances, however, had revenue performance challenges. In July and August, collections were US$257.4 million and about US$269.2 million against revised targets of US$271.2 million and US$280.7 million.

“This revenue under-performance implies underfunding of some planned budget projects and programmes,” Biti said.

In the financial sector, deposits grew by 3percent from US$3.59 billion in June to US$3.64 billion by July 2012. However, liquidity remained a challenge against high demand for affordable credit. Lending increased from 80percent in June to about 87percent of total deposits, but remained primarily short-term with lending rates still high ranging up to 30percent, he told reporters at his New Government Complex offices.

“Exports and imports maintained an upward trend, cumulatively reaching US$2.16 billion and US$5.1 billion respectively by end of August 2012,” he said. “This gives a half year trade gap of about US$3 billion, reflecting faster imports growth during the period under review.”

Biti outlined the major challenges still gripping the economy as revenue underperformance; consequent underfunding of various urgent government programmes such as agriculture, infrastructure, census and other social services; lack of liquidity, constraining banks to adequately fund productive sectors; low foreign investment hence Low capacity utilisation and high levels of employment; the continued high debt overhang blocking any new financing. Zimbabwe has an external debt of $9.1billion.

He said perceived uncertainties and delays over the Constitution making process was another challenge.

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