Published: 06 March 2014

Finance Minister Patrick Chinamasa said on Wednesday relations between Zimbabwe and the United States are severely strained to the extent that the two countries are not "talking".

Chinamasa, who was addressing Parliament in response to a question on whether the Government was negotiating with the US to improve the availability and accessibility of the United States dollars in the country, said there were no talks between the two governments.

Zimbabwe dollarized its economy in 2009 through adoption of a basket of currencies but the US dollar is the most commonly used.

"The United States has imposed sanctions against Zimbabwe," he said.

"We are not both politically and economically on talking terms. We cannot talk to them about economic issues when they imposed sanctions on us."

The US slapped Zimbabwe with an embargo over a decade ago after hijacking a bilateral dispute between Harare and the United Kingdom over the land reform programme.

Zimbabwe had expropriated large tracts of prime agricultural land from the white minority and redistributed to the black majority.

More than 400 000 households benefited from the land, which less than 4 000 whites had previously occupied.

Chinamasa said liquidity constraints which the economy continued to face would persist until the country implemented programmes to improve the situation.

The liquidity crunch has grossly impacted on economic recovery as industry struggles to improve production while product demand is depressed due to low disposable income.

But Chinamasa said Zimbabwe could only improve its situation through borrowing, foreign direct investment, lines of credit and improving its exports.

Borrowing, foreign direct investment and lines of credit have, however, not been forthcoming due to sanctions and vilification by Western countries.

"The other route is through aid but because of political differences with countries of the West, we are not a recipient of aid," he said.

- New Ziana

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