HARARE - Prime Minister Morgan Tsvangirai says government is forging ahead with the Medium Term Plan (MTP) amid slowing economic growth and the first signs of coalition tensions over missed fiscal targets.

Senior Zanu PF officials have roundly blamed Tsvangirai’s MDC for failing to maintain the upward economic trajectory as promised at the start of the coalition government three years ago.

Ministers from both sides of the coalition on Monday gathered to discuss the flat-lining economy at a budget consultative meeting of the government work programme at Pandhari Lodge in Harare.

Massive cash shortages, a poor agriculture season, crippling power and water shortages have cooled down economic growth for this year and government has revised downwards projections of 9,4 percent to 5,6 percent.

“This was mainly as a result of the underperformance in agriculture, problems related to our own policy discord, erratic power supply, water shortages, high cost of borrowing, limited irrigation capacity and obsolete machinery.

“Furthermore, the implementation of non-monetary matters like legislative and governance issues, especially in the area of key reforms, has been very slow,” said Tsvangirai.

There is a growing consensus that deeper spending cuts will be required.

Finance minister Tendai Biti is keen on cutting government spending, but senior MDC officials believe announcing another round of spending cuts close to the next election will be politically toxic.

Biti is also meeting resistance in his austerity measures from the police and defence forces, who are defying calls to freeze recruitment.

Tsvangirai said Biti was facing a mammoth task budgeting for 2013, given the competing interests to bankroll the referendum and the general poll as well as other national obligations.

“In short, the people’s demands for basic services are not going to be put in abeyance simply because this government has a referendum and an election to fund,” the MDC leader said.

“The people will continue to have high expectations for government to meet their needs, despite these other commitments that are going to put a major strain on our limited fiscus.”

The cash-strapped government has been forced to beg from rich neighbour South Africa for a $100 million lifeline and another request for $50 million from oil-rich Angola to plug a $400 million hole in the national budget.

Tsvangirai urged greater transparency in diamonds mining, which were expected to buoy the national budget this year by $600 million, but failed to meet the expectations. - Gift Phiri