Zimbabwe's Finance Minister Tendai Biti publicly announced that that he had been forced to lower the country's 2012 budget from US$4 billion to US$3.4 billion due to disappointing revenue inflows from diamonds from the eastern Marange diamond fields. Biti said that of the US$600 million which was expected from diamond sales this year, only US$41.6 million had been received in the first half of the year, reports newzimbabwe.com.
Describing the situation as "very worrying," Biti ásaid that the government had expected that by June 2012 half of the projected amount of diamond revenues would have been achieved, yet the amount actually received so far from the diamond sales is "way below what we anticipated," cites newzimbabwe.com.
The Marange diamond fields constitute a source of ongoing bickering in Zimbabwe's coalition government. Biti and the MDC party maintain that the proceeds from the sales of the diamonds are being diverted away from the treasury.
Biti also announced a revision of the country's GDP forecast, cutting it down from the previously projected 9.4 percent to 5.6 percent as a result of a poor harvest, lack of donor funding and policy inconsistencies. The announcements were made as Biti presented his Mid Term Fiscal policy in parliament, according to the news source. Biti explained that in order to expand production and boost jobs, the economy required foreign investment, particularly in the manufacturing and mining industries, the source further adds.