Summary After paying government salaries last week, Zimbabwe has only $217 in its bank account.
Finance Minister Tendai Biti says government finances are in a "paralysis state."
According to Finance Minister Tendai Biti, Zimbabwe has only $217 in its government bank account after paying last week s government employees. Surprising news as Zimbabwe contains some of the biggest reserves of diamond and platinum in the world.
"Last week when we paid civil servants there was $217 in government coffers," Biti said. "The government finances are in paralysis state at the present moment. We are failing to meet our targets."
Once called the "breadbasket" of southern Africa because of plentiful mineral reserves and fertile land, Zimbabwe has experienced gradual financial degradation — possibly because of over 30 years of despotic rule by President Robert Mugabe.
Mugabe allegedly shares governmental power with Morgan Tsvangirai following an international agreement after a political crisis in 2008. Some believe Mugabe is not the primary decision-maker.
The issue of "blood diamonds" is one prevalent to Zimbabwe. No less than $2 billion in diamonds were stolen from eastern fields, thus enriching the efforts of international diamond dealers, smugglers and other criminals while causing the country a significant loss.
Other issues that may have led to the current financial crisis include Mugabe s program of taking farm land from white owners and giving it to black tenants — most of whom were allegedly members of his party or associated with him in some way.
The introduction of the South African rand and US dollar as Zimbabwe currency have offered some level of financial stability, according to reports. Zimbabwe s budget for the year is $3.8 billion, with expected economy growth around 5 percent.
According to the UN, Zimbabwe needs at least $131 million this year for aid — most of which will be applied to food needs after a disappointing farming season left approximately 1.7 million facing starvation.
