Zimbabwe could grow at 4% in 2009: Minister Biti
CAPE TOWN (AFP) — Zimbabwe’s Finance Minister Tendai Biti said Friday the economy could grow by 4.0 percent this year after being battered by years of hyperinflation and economic contraction.
“We do have the vision and I think we should easily, easily achieve a growth rate of 4.0 percent this year, which is way above the expected African growth rate of 1.9 percent in 2009,” Biti said.
He was speaking at the World Economic Forum on Africa in Cape Town, where he discussed challenges to recovering from Zimbabwe’s economic crisis, which has been compounded by a year of political turmoil following failed elections in March 2008.
Prime Minister Morgan Tsvangirai, a member of a power-sharing government with long-ruling President Robert Mugabe, is set to hold talks on Friday with US President Barack Obama as part of a world tour to rally for financial assistance to rebuild the country.
According to the International Monetary Fund, Zimbabwe’s economy has been shrinking for years, contracting by 6.1 percent in 2007.
In 2006, a United Nations report pinned Zimbabwe as Africa’s worst economic performer.
The Zimbabwean government is trying to raise 8.5 billion dollars to rebuild the country, as Biti estimates 95 percent of the population is living on under 35 US cents a day.
Biti said between January and April the country collected revenues of 20 million dollars a month against a public expenditure of 100 million dollars a month.
“You have got huge demands, you have got high expectations … you quickly realise you have absolutely no fiscal space to operate.”
Public enterprises were a source of “fiscal drainage” such as flag carrier Air Zimbabwe which is losing 500,000 dollars a week, said Biti.
Deputy Prime Minister Arthur Mutambara said the growth in gross domestic product would happen as a result of the low starting point.
“We have destroyed 40 percent of our GDP over the past ten years, so we are coming from down there, so we have to come up,” said Mutambara.
He said the government was moving from ownership of enterprises, urging the private sector to step in as national transport, electricity and steel providers are in a state of collapse.
“We don’t want to own 100 percent of a rat, we would rather own 10 percent of an elephant,” said Mutambara.
Biti said archaic tax regimes and other systems had “fossilised and ossified” the workings of government.