Zimbabwe News and Internet Radio

Economy to grow by 3,7 percent: Biti

HARARE — Zimbabwe’s Finance Minister Tendai Biti on Thursday predicted that the country’s economy, ravaged by years of hyperinflation, would grow by at least 3.7 percent by the end of the year.

Presenting the country’s half-year national budget to parliament Biti also ruled out the return of the Zimbabwe dollar in the near future, increased the salaries of civil servants and slashed import duty on key raw materials.

“The country’s GDP (gross domestic product) is poised to grow by 3.7 percent,” Biti told lawmakers at a sitting also attended by Prime Minister Morgan Tsvangirai and deputy prime minister Arthur Mutambara.

“The figure of 3.7 percent is a very pessimistic one,” he said.

“The economy remains fragile and unable to sustain the return of the Zimbabwe dollar,” he added.

Biti said the growth would be spawned by “buoyant mineral prices on the international market” and increased production in the manufacturing sector.

But he warned the economic “green shoots” were no reason for complacency, urging the country’s political leaders to stick to a power-sharing agreement between Tsvangirai and long-ruling President Robert Mugabe, meant to haul the country back from the brink of collapse.

“The green shoots of recovery that are beginning to sprout don’t mean we are out of the woods,” Biti warned.

“Key to confidence building is the desire by all our partners to see that the political agreement is working, the global political agreement is being implemented to its letter and spirit and that there’s no policy reversal.

“I urge our principals to ensure the credibility and integrity of the global political agreement is respected not in terms of having tea together,” he said.

He bemoaned the state of the economy with its low revenue base and 70 percent of the meagre collections being swallowed by wage payments.

“Payment of a decent wage to our civil servants remains a priority,” Biti said. “The payment of the 100 US dollars, while welcome, has proved inadequate.”

The government was increasing the salaries of civil servants and the salaries would vary according to experience and position, Biti said.

“The public service commission is working out a pay structure they will announce in due course. I wish to commend civil servants for their resilience.”

Zimbabwe’s unity government started paying civil servants in US dollars in February to counter near worthless local salaries.

The move came after civil servants such as teachers, nurses and doctors downed tools last year demanding that they paid in hard currency.

Zimbabwe’s once-vibrant economy was shattered by a decade of world-record hyperinflation that has left half the nation dependent on international food aid, while unemployment was last estimated at 94 percent. AFP