Zimbabwe�s cash-strapped government said local authorities must ensure that diamonds and other natural resources are sold to the government to help it earn foreign currency, according to reports.

Addressing a large gathering of rural district councillors, the country�s vice president, Joice Mujuru, said it was �the duty of councils as the lower arms of government to ensure diamonds found in Chiadzwa, Marange are sold directly to the state.�

She said the government failed to earn any foreign currency when minerals are sold to foreign buyers. �Let us not put the diamonds to waste. Those who are exporting the diamonds are enriching other nations,� she added.

The money from foreign revenue will be used to purchase fuel, tractors and medicines, build roads, clinics and schools, Mujuru said. �The diamonds should benefit the Zimbabwean economy. They should be sold to government,� she stated.

Last month Zimbabwe�s President Robert Mugabe, 83, said that only the government would be allowed to mine diamonds after news of a discovery sent thousands rushing to the Marange deposit. The Marange mine licence which was held by the British miner African Consolidated Resources was later revoked and awarded to a state-run mining firm.

Since November 2006 the country has arrested around 28,000 people for illegal prospecting of gold and diamonds. Zimbabwe�s unemployment rate stands at 80 per cent and its annual inflation rate is around 1,700 per cent.