By Natalie Huet
MANCHESTER, England (Reuters) - Zimbabwe will not be ready for a presidential election until at least June because it needs a new constitution and democratic reforms to ensure a fair and undisputed poll, Finance Minister Tendai Biti said in an interview.
President Robert Mugabe, one of Africa's longest serving rulers and accused of hanging on to power through vote-rigging, has called for a new election in March.
But coalition partners including Prime Minister Morgan Tsvangirai, Mugabe's old rival, want a new constitution and electoral and media reforms after a violent and disputed poll in 2008 that was condemned by much of the world.
"Zimbabwe clearly is not ready for an election," Biti told Reuters late on Thursday during a visit to the University of Manchester in northern England.
"It's impossible to have an election in March," he said, arguing that the newly drafted constitution, as well as electoral and media reforms, would need to be introduced first to ensure the result of the poll was "credible, legitimate and sustainable".
Mugabe, 88, has been in power since independence from Britain in 1980, pushing through policies including the seizure of white-owned farms and forcing foreign firms to hand over majority stakes to local blacks.
His party, ZANU-PF, is due to endorse him again as presidential candidate at its annual congress on Friday.
Biti, secretary general of Tsvangirai's Movement for Democratic Change (MDC) party, said he hoped a referendum on the constitution could be held in the first quarter of 2013, paving the way for an election between June and August.
"We will limp our way to some form of acceptable agreement," he said. "Our people are tired. They want a solution. They want peace. So I think we will reach an agreement because everyone is exhausted."
Biti called on Zimbabwe's neighbors and international partners - starting with South African President Jacob Zuma - to play an active role in ensuring the process goes smoothly and help support the cost of the referendum and election, estimated at between $150 million and $250 million.
DIAMONDS NOT YET THE COUNTRY'S BEST FRIEND
Zimbabwe's economy is recovering after a decade of agricultural decline and hyperinflation, which led the coalition government to drop the worthless local currency in 2009 in favor of the U.S. dollar and South African rand.
This has brought annual inflation below 5 percent from an eye-popping 500 million percent four years ago.
But many fear a disputed election could trigger a new crisis for a country that has been struggling to pay back a $10 billion debt and whose $3.8 billion annual budget is cannibalized by government wages, leaving little room for investments in infrastructure and growth policies.
Biti has already slashed his 2012 economic growth forecasts twice in recent months, down to 4.4 percent, from 9.3 percent in 2011, reflecting the impact of a poor agricultural season and depressed commodity prices.
For next year, he forecasts 5 percent GDP growth, a figure he said was "very conservative" and took into account the risk of a disputed election.
Should Zimbabwe have "a decent election", Biti said, growth could reach 7.2 percent, helped by rising prices of platinum, chrome and gold, all of which Zimbabwe produces.
Mining, which currently represents 23 percent of GDP, will be the key driver of growth and the Treasury will "zero in" on diamond revenues to make sure they are collected, Biti said.
Diamond revenues have been a source of conflict within the coalition government. A gem watchdog last month said at least $2 billion of diamonds from Zimbabwe's Marange fields - one of the world's largest deposits - had been smuggled by people linked to Mugabe's party.
When asked about the issue, Biti said: "I don't have evidence of that. The evidence I have is that diamonds are being mined and we are not getting the revenue."
Diamond output has more than doubled since 2011 and diamond exports reached $600 million in October, but the government only received $41 million of diamond revenues this year, Biti said.
"If these were to be accounted openly, we'd at least be entitled to 50 percent of those $600 million. $300 million would make a lot of difference in my life as finance minister."
(Editing by Guy Faulconbridge and Matthew Tostevin)