Zim diamond money still missing

Finance minister Patrick Chinamasa says Treasury did not receive any proceeds from diamond revenue in the nine months to September 2013.

The newly-appointed minister - currently scrounging for 2014 budgetary support - told parliamentarians in Victoria Falls at a 2013 Budget Review Seminar last week that out of a targeted $40 million expected from diamond sales, nothing had been received during the period under review.

This comes on the back of escalating concern over accountability and transparency in the country's cash-rich diamond mining industry.

Last year, Chinamasa's predecessor, Tendai Biti, was forced to slash the country's National Budget to $3,4 billion from $4 billion after receiving a mere $41 million from a targeted $600 million expected from diamond sales.

Zimbabwe is the world's fourth-largest diamond miner, producing an estimated eight million carats annually and with potential to supply 25 percent of global demand.

Recently, former Prime Minister Morgan Tsvangirai raised concern over the remittance of diamond revenues.

"The secrecy and lack of transparency in the diamond mining industry has resulted in serious leakages and failure to remit satisfactory revenues to the State," the opposition MDC leader said during a lecture at Oxford University, England.

"While the minister of Finance expected $600 million from the proceeds of diamond exports in 2012, the State only received about $41 million.

"This is against reported sales of diamonds running into billions of dollars every year," he said.

According to Global Witness, an international non-governmental organisation, about $2 billion in diamond revenues have been unaccounted for since 2008.

Meanwhile, Chinamasa - who recently returned empty-handed from Washington, USA - has revised downwards revenue projection for 2013 from the initial $3,86 billion to $3,762 billion owing to the poor performance of the economy in October.

"Interim revenue collections as at October 29, 2013 indicate that revenue underperformed during the month of October.

"Collections amounted to $248 million against a target of $328,8  million for  the month," he said adding that the projected revenue collection for October has thus been revised downwards to $269 million.

The decision by government to revise revenue collections for 2013 comes on the back of poor performance of the economy, with latest figures from the Zimbabwe Revenue Authority indicating that revenue collections for the third quarter missed target by one percent.

Chinamasa said this has forced government to revise downwards revenue collections for November and December from a cumulative total of $816,2 million to $702,2 million.

The downward revision of the revenue collections is in line with the developments in the economy as the growth rate has also been revised.

The country's revenue collection is being pushed by value added tax contributing 29 percent, individual income tax raking in 20 percent, excise duty at 13 percent with customs duty and corporate income tax contributing 20 percent.

Zimbabwe appears to have limited capacity to stop economic bleeding and mitigate liquidity constraints due to its inability to ease the markets quantitatively by controlling money supply, according to the Zimbabwe National Chamber of Commerce.

Brains Muchemwa said Zimbabwe has been battling to curb an intensifying liquidity crisis at a time when 'quantitative easing has of late become the fashionable policy intervention mechanism in the developed world to jump start growth and stop companies from collapsing."