Harare - Zimbabwe narrowly missed third-quarter budget revenue targets as economic growth slowed and mineral royalties fell, underlining the tough task that President Robert Mugabe's government faces to lift the economy.
Mugabe, 89, and Africa's oldest leader, returned to power with a thumping victory in a July 31 vote disputed by his rivals and has promised to turn around the economy and create jobs while pursuing a controversial policy of forcing foreign-owned firms to hand over majority shares to black nationals.
The Zimbabwe Revenue Authority (ZIMRA) said on Thursday it collected $897 million between July and September against a target of $905 million.
It said many companies were scaling down operations or had totally shut down.
“The economy continued to face challenges such as erratic power supplies, liquidity constraints, depressed industrial capacity, among other challenges,” Stanford Moyo, the ZIMRA chairman said.
Manufacturers have been the most hit, operating at a third of capacity and battling high financing costs and demands for higher wages from restless workers.
Moyo said company tax collections were 3 percent short of target and mining royalties were 39 percent below projections, blaming this on fluctuating mineral prices and failure by some diamond mines under Western sanctions to sell their stones.
The European Union last month indicated it would remove sanctions on the state-owned Zimbabwe Mining Development Corporation, a joint shareholder in four diamond mines.
This could boost future government revenues.
Zimbabwe is also a significant platinum producer.
Individual tax collections rose 23 percent after the tax agency extended its net wider, but the troubles facing local companies would see a decline in future, said Moyo.
Zimbabwe's economy is expected to grow by 3.4 percent this year, down from earlier projections of 5 percent.
New Finance Minister Patrick Chinamasa is expected to present the 2014 national budget next month. - Reuters