Zimbabwe economic growth could exceed forecast: Biti

Economic growth could exceed the Zimbabwe government's forecast of 9.3 percent in 2011, helped by strong commodity and food prices, but politics are a negative, the country's finance minister said on Thursday.

The government has revised up its forecast for mining sector growth in 2011 to 47 percent from 44 percent, and overall growth forecasts are easily achievable, Tendai Biti told Reuters in an interview on the sidelines of the African Development Bank's annual meeting.

"I genuinely believe the growth rate could be higher, mainly because of the strong performance of international commodity prices," he said.

"The food crisis is helping us as we are in a surplus position in grains."

Consumer-focused industries such as telecoms were also likely to see strong growth, he added.

Zimbabwe is starting to become a favourite among yield-hungry emerging market investors now that some political and economic stability has been achieved under the power-sharing government set up in 2009 by bitter foes President Robert Mugabe and Prime Minister Morgan Tsvangirai.

Matthew Pearson, Africa equity strategist at Standard Bank, told Reuters Investment Outlook summit this week that he was an "ardent fan" of Zimbabwe.

But the AfDB and the International Monetary Fund have lower forecasts for Zimbabwe's growth, amid concerns about a budget financing gap.

The AfDB this week forecast 7.8 percent growth for Zimbabwe in 2011, and 5.4 percent in 2012.

Biti, a member of Tsvangirai's Movement for Democratic Change, said the unhappy political alliance, which has led to increasing political violence, was putting a dampener on growth prospects but was unlikely to collapse.

"It will limp along," he said. "It's like a dog's breakfast that not many dogs would love to have."

The political problems were also preventing Zimbabwe from clearing its $7.1 billion in foreign debt, Biti added.

He said Zimbabwe's use of multiple foreign currencies instead of the Zimbabwe dollar, which became worthless due to hyperinflation in 2008, could stay in place for at least several years.

"We are going to maintain it for as long as possible," Biti said.

"The only reason why we should move is if the region moves towards a customs union with a new regional currency."

The dollarisation of the economy has also been instrumental in making Zimbabwe more attractive to international investors.

Biti said French finance minister Christine Lagarde, who attends the AfDB meeting on Friday as part of her campaign to become head of the IMF, was worthy of the position.

"I think Madame Lagarde is going to be the next head of the IMF. I think she deserves it. But we need to democratise these institutions -- Africans should be given a chance."

The African Union said on Thursday it would like to see a non-European in the position.