via 2014 budget targets ‘ambitious’ – analysts | The Source December 20, 2013
The 2014 national budget targets are ‘too optimistic’ and government could struggle to meet revenue targets because of weakening international mineral prices, analysts said on Friday.
Chinamasa projected that Zimbabwe’s economy would grow by 6.1 percent in 2014, rising to 6.4 percent in 2014, despite the country’s failure to meet its economic targets this year and worsening macro-economic conditions and a disappearing manufacturing sector.
The $4.4 billion budget, he said, would be anchored on the strong recovery of agriculture and the improved performance of the mining and construction sectors, which he said would grow by nine and 11 percent respectively.
There are expectations of significant earning from diamonds after Zimbabwe held its first ever diamond auction of nearly 280 000 carats in Belgium which ended on Monday, earning $10.4 million.
“It is obvious that the (finance) minister premised his budget on (earnings from) mining, but why he would do that when mineral prices are going south elsewhere is baffling,” Chamber of Mines and Zimplats chief executive, Alex Mhembere said at a post-budget seminar organised by the Confederation of Zimbabwe Industries.
He later told The Source that the mining industry was still studying the impact of the measures announced by the government.
“There are so many,” he said.
Zimbabwe has eight companies involved in diamond mining in the government-controlled Marange area, with the Government holding 50 percent stakes in seven through the Zimbabwe Mining Development Corporation, while it wholly owns Marange Resources.
In the budget, Chinamasa said government will charge 10 percent royalties on gross diamond sales from 1 January and the mines would also pay an additional 2.5 percent resource depletion levy directly to Treasury, and not to the ZMDC as was the previous case. carats.
Zimbabwe is home to one of the world’s largest diamond fields in the eastern Marange district.
Participants at the CZI seminar noted that the budget provided no incentives for the large industry or financial support, concentrating instead on small-scale enterprises.
“The economy is on the edge,” noted Nestle Zimbabwe managing director, Kumbirai Katsande.
“Zimbabwe is a high cost economy and that needs to be addressed.”