Zimbabwe’s central bank Governor Gideon Gono has called for a four-month freeze on prices and wages in a last-ditch bid to halt the Southern African country’s dizzying economic decline, it emerged on Thursday.
Unveiling a package of measures aimed at capping inflation and encouraging economic recovery, the head of the central bank said Zimbabwe is in the middle of a vicious economic war that can only be won by a united effort from all sectors of society.
”Consultations with President Robert Mugabe, ministers and labour representatives [have] generated unanimity that the month of February 2007 be used to secure a firm social contract for a transitional freeze of all prices, wages, salaries, fees, interest rates, municipal charges and all other forms of tariffs and rates in the economy, to be reviewed after an initial period of four months,” Gono said in the full text of a monetary policy statement published on Thursday.
If approved, the freeze will run from March 1 to June 30.
Zimbabwe is in the throes of its worst-ever economic crisis, with inflation currently running at 1 281,1% and worsening shortages of foreign currency, fuel and desperately needed HIV/Aids drugs.
Critics lay much of the blame for the economic crisis on the 82-year-old Mugabe’s controversial policies, including his seizure of more than 4 000 productive white-owned farms since 2000, which has seen agricultural production plummet by at least 40%.
The Zimbabwean leader, who has been in power since independence in 1980, insists the country is under illegal sanctions imposed by the United States and former colonial power Britain.
In his monetary policy statement, Gono warned he would slash money supply growth from the current 1 000% to between 415% and 500% by December.
He hit out at major price distortions that mean, for example, that a Zimbabwean doctor has to save the whole of his salary for 14 months just to be able to afford a bed.
Gono also called for the removal of government subsidies on fuel, fertiliser and maize, which, he said, were being abused by the politically well-connected. — Sapa-dpa