In DepthSoapboxZimbabwe's diamonds are not forever

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Posted on Thursday, 15 March 2012 16:19

Zimbabwe's diamonds are not forever

By Konye Obaji Ori

Sanctioned to a breaking-point, Zimbabwe's one and only president since independence, Robert Mugabe has driven the southern African country on economic fumes, but are the fumes fizzling away?

Finance Minister Tendai Biti has warned that the one-time economically thriving nation could shut down/Photo/ReutersWith little support, the country has managed to survive on through grit and guts and the promise of diamond revenue after the discovery of large diamond fields. Diamonds were supposed to be the panacea to the country's myriad of economic ills.

But despite that promise, Zimbabwe's Finance Minister Tendai Biti has warned that the one-time economically thriving nation could shut down, as it was on the brink of bankruptcy.

Biti makes this prediction as new diamond sales from the contentious Marange fields are falling far short of expectations. "Diamonds have to deliver, otherwise the only thing we will be able to do is to pay wages, which means government will virtually closedown," Biti told a news conference Wednesday.

Zimbabwe has braved economic sanctions, agricultural down spiralled and industry is a pale shadow of its former self, but diamonds have been the major fumes driving the country's economic engine.

But it appears the Marange diamonds are not forever. Zimbabwe anticipated US$77.5 million from diamond sales during the first two months of the year, but only received US$19.5 million.

"That's an unacceptable situation, that's an unhealthy situation and that's cause for concern because we are back again to days of a fragile state that cannot look after its citizens in terms of education, health, roads and clean water," Biti added.

The reason for the rising economic tensions in Zimbabwe, analysts argue, is simply because there has not been any diamond auction since the beginning of the year.

This, that the government is literally broke, is a startling revelation, as the country was basking in the glory of an economic recovery and stability, unknown since the turn of the millennium.

The Finance ministry had projected U$600million in revenue from diamonds, to billet Zimbabwe's US$4 billion budget for this year. Mugabe must now rely on revenue from tobacco and gold. Tobacco is expected to contribute $300 million to the economy this year.

Mugabe is demanding funds for this year's elections. Prime Minister Morgan Tsvangirai wants political reforms before elections. But the finance minister is saying the country is running out of funds for reform or for elections.

After 32 years in power, Mugabe is seeking re-election in polls due before 2013. And after having joked that he has died and been resurrected more times than Jesus Christ, Mugabe's supernatural abilities could perhaps raise Zimbabwe's once booming economy from the dead.

Also read:
Zimbabwe: No elections without reform
Anti-Mugabe clause threatens new Zimbabwe constitution
Happy Birthday Mr. President Mugabe, A beauty pageant perhaps?
Zimbabwe diamond mining shrouded in secrecy
Country profile: ZIMBABWE





Last Updated on Thursday, 15 March 2012 17:27

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