From Business Day

Zimbabwe has missed its projections on revenue and mineral royalty collections for 2013, pointing to a struggling economy weighed down by the growing informalization of its main sectors, such as mining, economic experts have said.

Finance Minister Patrick Chinamasa has called on the banking sector in Zimbabwe to make funding available to the informal sector in Zimbabwe, saying the country’s economic model is moving away from a formal one. But the banks, cash-squeezed owing to a liquidity crunch, are hesitant to pour the little money they have into companies and businesses without formal structures, according to a local banker.

Econometer Global Capital analyst Takunda Mugaga told Business Day on Thursday that missing mineral royalty payment targets by a margin as big as 45 percent suggested there were bottlenecks in the economy.

He said the informal mining sector was a factor in the missed targets as participants in it, such as small-scale gold and chrome miners, did not pay royalties.

Mineral royalty payments for 2013 amounted to $133.7m against a target of $245m, missing the target by a massive 45%, Zimbabwe Revenue Authority chairman Sternford Moyo said.

“The royalties policy in Zimbabwe is not promoting investing; most people are evading paying royalties. It’s dysfunctional to the mining sector,” Mr Mugaga said.

Written by Tawanda Karombo/Read more at Business Day