In 2014 Zimbabwe’s President Robert Mugabe will once again have the economy as his biggest political opponent with the government struggling to pay civil service salaries, indigenous banks folding, diamond revenue plummeting and the agricultural sector in near collapse.

Mugabe in early December , addressing party supporters at ZANU PF’s congress was in denial his government was broke.

“You can’t say there is no money. Where is our platinum going? Where is our gold going? Where are our diamonds going?” Mugabe said.

Since winning the controversial July 31 vote ZANU PF embarked on an economic revival plan which it calls Zimbabwe Agenda for Sustainable Social-Economic Transformation (Zim Asset). But as of now nothing has come out of that idealistic document, instead things have become tougher.

With ZANU PF back on the driver’s seat as the ruling party, the new Minister of Finance and economic development, Patrick Chinamasa last week presented his 2014 budget worth US$4.1 billion which MDC T leader Morgan Tsvangirai saying it “stretches Zimbabweans patience too far”.

This budget is worth more than $3.8 billio of 2013 presented by Tendai Biti, former Finance Minister in the power sharing government.

Biti’s budget came at a time when the economy had slowed down in 2012, a development which forced him to cut down economic growth by more than half, from 9.4 percent to 4.4 percent, with three quarters of that budget paying civil service salaries  leaving a crippled government unable to finance day to day activities.

Dwindling Diamonds

In Chinamasa $4.1 billion wish list tax revenues are expected to raise $3.8 billion (29 percent of the nation’s gross domestic product) while non tax revenue must raise $296 million. The major targets are 6.1 percent economic growth, agro related business is projected to grow by 9 percent, mainly driven by growth in maize, cotton, soya beans and groundnuts, among other crops.

The mining sector is projected to grow by 11.4 percent on the back of planned investments and largely driven by strong performance in gold, diamonds, nickel and coal. There will also be heavy surveillance on diamond operations.

But what has for years been taunted as Zimbabwe’s ticket to economic revival- diamonds- are reported to be fast depleting.

All the seven companies operating in the diamond sector namely Mbada Diamonds, Marange Resources, Anjin Investments, Diamond Mining Company, Jinan, Kusena and Gye Nyame told parliament that alluvial deposits were fast running out and soon it would prove costly to extract the mineral.

To make matters worse the highly anticipated diamond auction in Antwerp Belgium  got off to a slow start this week with the majority of the 279,723 carats from Zimbabwe being of low quality and not properly cleaned. The diamonds racked in a combined measly US$10.7 million. From that amount government got 15 percent for royalties.

For years Zimbabwe’s diamonds were branded conflict gems because of gross human rights violation and military interference resulting in killings at the Chiadzwa diamond fields.

Looking East

During the previous government, Biti bemoaned lack of willingness and transparency in diamond revenue remittances.  At one point he revealed that the government was so broke with only $217 in its official bank account.

But now with ZANU PF alone in government Biti says it has got a political and economic war on its hands.

“The budget clearly avoided the contentious issue of addressing the fundamental issues faced by agriculture with regard to security and access to finance for new farmers. Zimbabwe cannot progress without addressing this issue,” Economist Vince Musewe said.

ZANU PF continues to blame targeted sanctions imposed by the West for human rights violations. As such they have developed a “look East policy” looking for salvation from the Chinese. However, for the first time Mugabe told of his frustrations on exploitation the country is facing at the hands of Zimbabwe’s “all weather” friends.

During the budget presentation Minister Chinamasa highlighted that there is need to re engage the international community and negotiate for assistance.

But political analyst Zama Mkwananzi said for re-engagement, the ruling party must swallow pride and accept terms and conditions. However, that is almost impossible.

“… political will is clearly not there because whenever Mugabe gets a chance to attack the West he does so without thinking twice and so do his ministers,” Mkwananzi said.