Zimbabwe to seek regional help for economy

Zimbabwe will seek funds from southern Africa to help finance its budget as the country battles effects of a nearly decade-long downturn, Finance Minister Tendai Biti said on Thursday.

"I am appealing to our colleagues in the SADC [Southern African Development Community] countries," Biti said in an address on the state of the economy. "I have secured an appointment two weeks from today, with South African Finance Minister Pravin Gordhan where we are going to ask for budgetary support to the tune of $100-million.

"Another thing we are doing is appealing to our friends in SADC. We are also in discussions with the Angolans for a $50-million credit facility."

Zimbabwe's powerhouse neighbour South Africa, the continent's largest economy, will also be asked to make good on a line of credit promised in 2009 to the tune of R500-million, he said. Biti said although the economy was stable since the hyperinflation-crippled local dollar was dropped in favour of foreign currencies, money was short in both the government and the private sector.

"I regret to announce that the economy still remains depressed with funding challenges for both private and public sectors, irrespective of the prevailing stable macroeconomic environment and some output improvements in sectors such as mining," said Biti who in July cut the year's growth forecast from to 5.6% from 9.4%.

He blamed low economic performance on lack of money to fund productive projects, low foreign investment, high unemployment, a high debt overhang and uncertainty and delays over the constitution-making process.

Zimbabwe's economy has shown signs of recovery since veteran President Robert Mugabe and long-time rival Prime Minister Morgan Tsvangirai formed a unity government after 2008 poll chaos.

Biti said revenue collections were still falling short with $257.4-million collected in July against a $271.2-million target and $269.2-million in August against a target of $280.7-million.

The gold-mining sector was on course to attain the annual target of 15 000 kilogrammes, while inflation was on the slide due to the depreciation of the South African rand against the dollar. He said payments for imports rose by 30% from the same period last year to reach $5.1-billion. – Sapa-AFP

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