Zimbabwe's government may shut down without diamond revenue, says finance minister

Finance Minister Tendai Biti told reporters today: “Diamonds have to deliver, otherwise the only thing we will be able to do is to pay wages, which means government will virtually close down.”

Zimbabwe’s government could shut down unless revenues from diamond sales flow into the treasury, Finance Minister Tendai Biti warned Wednesday.

The ministry expected to receive $77.5 million from diamond sales over the first two months of this year, but has only seen $19.5 million, Biti told a news conference, according to Sky News.

Biti said the mining ministry had told him that no diamond auctions had been held since the beginning of the year.

“Diamonds have to deliver, otherwise the only thing we will be able to do is to pay wages, which means government will virtually close down,” Biti said.

“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.”

He added that the finance ministry lacks funds to hold the early elections that President Robert Mugabe is pushing to hold this year, and will only have enough money to hold a national census in August and a referendum on a new constitution around the same time, the Agence France Presse reports.

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Zimbabwe’s fragile power-sharing government was formed in 2009 following elections tainted by violence. Government ministries are shared between President Robert Mugabe’s Zanu-PF and the MDC party.

Biti is an MDC member, while the mines ministry is controlled by Zanu-PF. According to the Associated Press, rights groups have expressed concern that unaccounted-for diamond revenue could be used by Zanu-PF to finance intimidation and violence in the early polls favored by Mugabe.

According to the BBC, Biti’s announcement on Wednesday is likely to generate significant tension between the finance minister and Mugabe. Both MDC leader Morgan Tsvangirai and South African President Jacob Zuma, who has acted as a mediator between the MDC and Zanu-PF, say elections should not be held before political reforms are enacted, including a new constitution.

But Mugabe has insisted that “money has to be found” and that the elections go ahead “with or without a new constitution.” 

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