Zimbabwe raises $40 mln from referendum bond
* Bond floated for pension funds
* Referendum to be held on Saturday
By MacDonald Dzirutwe
HARARE, March 11 (Reuters) - Zimbabwe has raised $40 million from a special bond floated to the local unit of Old Mutual and the state pension fund to help finance a constitutional referendum this weekend, the finance minister said on Monday.
Tendai Biti said the one-year bond would attract an interest rate of 7 percent.
Zimbabweans will vote on Saturday in a referendum on a draft constitution, a crucial step toward a general election later in the year.
"This is a voluntary bond on the same terms that the companies are lending to the market," Biti told journalists.
Old Mutual Zimbabwe and the government owned National Social Security Authority are among the country's largest funds.
Biti said the government had already given $31 million to the Zimbabwe Electoral Commission and the additional $40 million would be enough to cover the costs of the referendum.
Adoption of a new constitution seems almost certain since both President Robert Mugabe's ZANU-PF and Prime Minister Morgan Tsvangirai's Movement for Democratic Change back it and have the two-thirds majority needed to steer it through parliament.
The proposed supreme law seeks to curb sweeping presidential powers while strengthening state institutions such as the cabinet, parliament and judiciary.
Biti repeated that Zimbabwe would need the help of foreign donors to fund its presidential and parliamentary elections that require $132 million. The cash-starved government had only budgeted $25 million for the two events.
The elections are expected around July.
The government is struggling to fund its national budget without donor help amid a slowdown in economic growth to 4.4 percent last year from a 9.3 percent expansion in 2011.
Biti said the economy remained "very depressed" with tax revenues below target so far this year while government spending, especially the salary bill for its employees, continued to rise. (Reporting by MacDonald Dzirutwe; editing by David Dolan)
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