Friday, March 12, 2010

(NEWZIMBABWE) 'We're on our own': Biti on foreign aid

'We're on our own': Biti on foreign aid
by Nelson Banya
11/03/2010 00:00:00

ZIMBABWE will have to rely on its own resources to revive its economy because foreign donors are unlikely to provide nearly enough help, Finance Minister Tendai Biti said on Thursday.

A unity government formed by bitter adversaries President Robert Mugabe and Prime Minister Morgan Tsvangirai last year says it needs at least $10 billion to fix an economy emerging from a decade-long slump. But key Western donors have withheld aid and demanded broad political reforms and assurances that Mugabe is ready to genuinely share power.

Biti, the secretary general of Tsvangirai's Movement for Democratic Change (MDC), said Zimbabwe would have to finance its projected budget deficit of $810 million from its own resources.

"It's very unlikely that donors will fill that $810 million gap, we're on our own," Biti said. "Last year we got $35 million -- $30 million from South Africa and $5 million from China. 2010 is going to be worse, we have to mobilise our own resources."

Although the power-sharing government has managed to stabilise the economy after 10 straight years of decline and inflation which peaked at 500 billion percent, the country is struggling to restore productivity, feed itself and repair its ruined infrastructure.

On Thursday, Biti handed over $100 million -- from a $510 million International Monetary Fund allocation Zimbabwe received last year -- to government ministries and state enterprises for infrastructure projects ranging from water and sanitation to road construction and power generation.

The government used $50 million to purchase seed and fertiliser last year in a bid to rescue an agriculture sector hit by poor funding, planning and inadequate rains.

"The $100 million constitutes a major injection into the economy, a stimulus in our own small way," he said.

The government has also extended $19.5 million in credit lines for private sector firms. - Reuters

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