March 11, 2010  Print Email | Beer sustains Mugabe regime
And the tobacco road
Posted by Conrad Dube at 02:59 PM GMT on Mar 18, 2009 | ALCOHOL AND tobacco have sustained Robert Mugabe’s regime as formal economy has virtually collapsed, Zimbabwe finance minister has said.
While presenting a revised 2009 budget to parliament, finance minister Tendai Biti said: “Indirect taxes made up of customs and excise duty have contributed 88% of government revenue which means that the government has been literally sustained by beer and cigarettes. This is unacceptable.”
Biti revised downwards revenue expectations from US$1,7 billion announced by the then acting finance minister- an appointee of Mugabe- in January to US$1 billion. Biti said expenditure would top US$1,9 billion, therefore the budget forecasts a 43% loss.
 Zimbabwe is in the throes of an economic crisis that critics blame on bad governance by Mugabe administration since he came to power 29 years ago. Economists say skewed government policies, an often violent land reform and corruption have milked the Zimbabwe economy, once the breadbasket of southern Africa. They also blame over-expenditure due to continued printing of the now abandoned Zimbabwe dollar.
But presenting his maiden budget since the formation of an inclusive government, Biti said: “We are now implementing the basic law of hunting economics. What we gather is what we eat.”
Biti said money supply was a problem in Zimbabwe as the country is not exporting any products and government was operating on a cash basis.
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