Finance Minister, Mr Tendai Biti has admitted that donor funding has failed to facilitate economic growth resulting in government removing a vote of credit in the US$2,7 billion budget for 2011.
In a sudden u-turn from his normal policy of sourcing additional treasuryÂ funds from development partners,Â MinisterÂ BitiÂ saidÂ the externalÂ financiersÂ were not cooperating as only US$300 million was raised from aÂ projectedÂ US$810 million of the 2010 national budget of US$2,3 billion.
However, he could not admit that the failure to get the funds is due to the illegal sanctions imposed by the west.
Presenting the 2011 National Budget, MrÂ Biti revealedÂ that government will be sticking with a cash budgeting system through mobilising funds from internal sources.
â€œWe are no more going to do with the vote of credit but instead we are now focusing towards local resources,â€ Minister Biti said.
At a time when government is forging ahead with the indigenisation policy, Minister Biti could not reveal further how the 2011
budget would assist in ensuring the success of the policy.
The Minister however said the economy is still facing challenges due to increased imports at the expense of exports.
â€œThere is still more that is being done to increase exports and more still needs to be done on that aspect,â€ said Mr Biti.
Some of the key highlights of the 2011 National Budget include a US$400 million allocation to the education sector, 9,3% economic growth forecast,Â an adjustment ofÂ income tax-free thresholds from US$175 to US$225, an increase inÂ bonus tax-free thresholds from US$400 to US$500 and the retention of a duty-free system on basic commodities.
Acknowledging that Zimbabwe is doing better than other countries in the region due to peace and stability in the country, macro-economic policies, improved agriculture and mining activities, Mr Biti said the Gross Domestic Product (GDP) is expected to grow by 16,1% and the economy by 9,3% translating to US$8,1billion.
He also said the government will establish a one stop investment centre by the 13th of December this year.
Another issue that received attention form the Finance Minister was the issue of lines of credit.
â€œZimbabwe will benefit from a US$70 miilion credit facility from Botswana and that negotiations are underway between government and PTA Bank to secure more funds,â€ said Mr Biti.
Highlighting the need to create a fair economy, Minister Biti said the government will compel retailers to display cross rates of United States dollars (USD) and Rands in order to protect consumers from unfair exchange rates.
On the issue of imports and exports, Minister Biti said despite the increase in mineral exports, there is no improvement on the economy and he increased the royalties on alluvial diamond from 10% to 15%.
He said high duty on finished goods encourages smuggling and has reduced duty on motor vehicles from 60% to 40% and duty on medical apparatus has been reduced to 30%.
Minister Biti scrapped duty on generators and pegged duty on poultry at 5%, whole the suspension of duty on basic goods, excluding soap, has been retained until the 30 of June next year.