Zimbabwe Finance Minister says revenue crunch may shut government

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HARARE – Zimbabwe’s government faces a shutdown because projected revenue from the diamond industry has failed to come through, the finance minister warned on Wednesday.

“Diamonds will have to deliver, otherwise the only thing we have to do will be to pay wages and government will have to close,” Tendai Biti told reporters.

“We cannot have a situation where 70 percent of revenue is going towards wage demands. That’s not an acceptable position. Wages are crowding out other government expenditures,” he said.

Biti said according to the mines ministry, diamond auctions had not taken place in 2012 before March.

Biti is a member of the opposition Movement for Democratic Change which is in an uneasy coalition government with President Robert Mugabe’s ZANU-PF party.

ZANU-PF controls the mines ministry and is therefore seen as profiting from the diamond sector.

Zimbabwe’s economy has been in a tentative recovery after a decade of steep decline but with unemployment at 80 percent its tax and revenue base remains extremely low.