News Tonight Africa

Zimbabwe has planned to use some portion of mining royalties to launch sovereign wealth fund to help the ailing economy. Zimbabwe currently ranks at 14th position in per capita GDP among the countries in Africa.

The unemployment rate is high and commodity prices are rising. President Robert Mugabe is facing criticism for the ailing economic conditions and hyperinflation. The economy has shrunk by almost 40 percent since year 2000. The country has better literacy rate compared to African average. The high rate of unemployment has led to massive outrage among residents.

Finance Minister Patrick Chinamasa added that wealth fund will help the economy. 25 percent of special dividend from gold, platinum and diamonds will also add to the fund. The minister added that first priority for the government is spending on infrastructure sector.

The country currently charges 10 percent royalty on platinum mines’ revenue. The government has also started charging additional 15 percent tax on exports of platinum from the country from current year. The country has second largest platinum deposits in the world. If the government can change the economic conditions of the country for better, residents will support the move.

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