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Zimbabwe’s supermarket economy – Tendai Biti

By The Africa Report
Posted on Friday, 25 November 2011 11:15

Zimbabwe’s Finance Minister Tendai Biti has warned that the appetite for foreign trips by government officials is threatening the country’s economic recovery.

Unveiling a US$4 billion budget for next year in parliament on Thursday, Biti said at least US$45 million had been spent on foreign trips this year.

“With regards to foreign travel, this continues to be a cancer in the management of our public resources,” he said.

“Between January (and) September, 2011, an unacceptable sum of $45.5 million, representing 1, 2 percent of the total budget had been spent on travelling.”

Biti, a senior member of the Movement for Democratic Change said measures put in place to control the expenditure – including stripping ministers of aides on foreign trips had so far failed.

“Government has tried to prescribe measures to restrain travel outside the country, thereby containing travel expenditure.

“However, there still remains a lot to be done, especially a change in culture and self-financial discipline at all levels,” he said.

He said some ministers were subjecting him to unnecessary pressure by demanding high per diem rates when travelling on government business.

President Robert Mugabe who usually travels with a bloated delegation has been to Asia almost 10 times this year to seek medical treatment.

A supermarket economy

Biti said he had initially drafted a $3.4 billion budget but following a recent Kimberley Process agreement on the sale of Marange diamonds into Western markets, he increased the budget to $4 billion.

He said Zimbabwe’s fragile economy was expected to grow by 9.4 percent driven by agriculture and mining.

He said this year the mining sector had attracted $502 million investment this year.

But the government is pressing ahead with a law forcing mining firms to surrender at least 51 percent stakes to blacks, which has led miners to halt expansion of their local operations.

Gold production is expected to more than double to 28 tonnes next year and diamond sales could total $600 million.

However, Biti said Zimbabwe has remained a “supermarket economy” as it plunged into a trade deficit of $3,1 billion between January and September, having imported goods worth $6,3 billion against exports of $3,2 billion.

Of the total imports, finished goods accounted for $2,7 billion while raw materials, intermediate and capital goods amounted to about $361,4 million, $2,5 billion and $714 million respectively.

Vehicle imports and chemicals, including fuel, accounted for $2 billion.

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