Big blow to Zim budget

Harare - Zimbabwe Finance Minister Tendai Biti said Wednesday that government revenues would be 43% lower than predicted when the national budget was presented in January.

Biti took office last month when the Movement for Democratic Change (MDC) joined long-time President Robert Mugabe in a unity government, following nearly a year of political turmoil.

Biti presented a revised budget to parliament, updating the one unveiled in January by Mugabe's cabinet.

His new estimates showed that Zimbabwe's government revenue would be one billion dollars, down from the $1.7bn projected in the January budget.

"This is a loss of budgeted expenditure of 43%," he told parliament.

"The task of turning around the economy becomes the toughest job of the inclusive government."

He urged Zimbabweans to accept the grim realities of the revised budget, which will hamper government's already limited ability to cope with 94% unemployment, world-record hyperinflation, and nationwide food shortages.

"Demands on the treasury are high and limitless. It is important for Zimbabweans to take a reality check. The reality of our economic situation is that it is grim," he said.

Biti's budget followed through on MDC promises to pay civil servants in foreign currencies. Bureaucrats, teachers, doctors and the military can now expect payments in US dollars, budgeted at $299m.

He also budgeted $32m for "vulnerable groups" such as child-headed families.

Zimbabweans are surviving largely on foreign aid, with international agencies distributing food rations to nearly seven million people - the majority of the population.

A cholera epidemic has hit more than 91 000 people, killing more than 4 000 people, but public hospitals only opened their doors after MDC leader Morgan Tsvangirai became prime minister last month.

Public hospitals and clinics still have little medicine or supplies, leaving international agencies to battle the cholera epidemic.

- AFP