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19 Jul 2003 07:25
Zimbabwe is grappling with record inflation of 364,5%, rising at nearly one percent a day, a nightmare for ordinary Zimbabweans.
The latest figures from the state-run Central Statistical Office (CSO) show that inflation jumped from 300.1 percent in May and is likely to rise further.
The figures are significantly higher than those of other countries in the southern African region, badly hit by disease and drought.
In Zambia, inflation is estimated to be 25%, while in Botswana—the regional economic success story—the figure is 11,1%.
News of Zimbabwe’s latest inflation figures has been greeted with dismay.
“The chief victims are the populace—in fact anybody except the political plutocrats or those with access to forex,” charged an editorial in Friday’s Zimbabwe Independent, a private business weekly.
“Those with a little savings or on fixed incomes have been ruined.”
Shoppers here find prices increased on a weekly basis.
Houses in Harare’s plush northern suburbs that cost around three million Zimbabwe dollars in 2001 now sell for anything up to 300-million Zimbabwe dollars ($364 000).
Last week bakeries increased the price of bread by up to 1 000% in reaction to a similar hike in the price of flour by millers.
Analysts say Zimbabwe’s economic woes date back to the late 1990s but deepened following the start of a controversial land reform programme to take over white-owned commercial farms for redistribution among new black farmers.
The programme has resulted in a downturn in foreign investment and chronic foreign currency shortages. The impact can be felt at all levels of society.
Last month bodies were reportedly piling up at Harare’s crematorium due to a shortage of hard cash to buy gas to run the furnaces.
The Zimbabwe government blames its economic problems on hostile foreign forces and the opposition Movement for Democratic Change (MDC), which it says has been calling for “economic sanctions” against the country.
The United States, Britain and the EU have all imposed targeted sanctions against President Robert Mugabe and members of his government for alleged human rights and democratic abuses.
Independent economic analyst John Robertson said the government was both the beneficiary and the victim of its own policies.
He said its policy of borrowing local money at interest rates kept below the rate of inflation for the past two or three years had seen it repaying money back to lenders, such as pension funds, at a fraction of its original value.
“Nearly all our pensioners have been pauperised by this process,” said Robertson.
“There are hundreds of thousands of people who have lost their savings.”
He added that the government was in a “short-term survival mode” when it resorted to printing money for unproductive uses such as wages for soldiers and civil servants.
The government is in the process of pumping 24-billion Zimbabwe dollars ($29 million) worth of new banknotes into the economy to stave off severe cash shortages.
The result of such policies, Robertson predicted, would be “increasing inflation and increasing misery”.
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