Zimbabwe domestic borrowing up 52 pct to $544 mln y/y in Jan

HARARE (Reuters) – Zimbabwe government’s domestic borrowing jumped 52 percent to $544.03 in January year-on-year from $358.80 percent in the same period a year ago, the central bank said on Thursday.

The southern African country is struggling with falling revenue from taxes, which stood at $469 million in January against a target of $542 million, as the economy stalls and businesses are forced to lay-off workers or shut down.

The central bank said the government had racked up the debt largely through issuing Treasury bills to raise money to plug the tax revenue shortfall and settle domestic loans.

More than 80 percent of Zimbabwe’s total revenue is used to pay government workers, leaving little money to build infrastructure such as roads, hospitals and schools.

Finance Minister Patrick Chinamasa has said the government is actively looking at ways to reduce its wage bill, but it has few choices other than cutting salaries or jobs, decisions which could have serious political ramifications.