GIDEON Gono . . . also hiked interest rates to 1 200 percent.

HARARE – Zimbabwe’s annual inflation quickened to 26 470.8 percent in
November, to set a new world record and highlight President Robert Mugabe’s
inability to break a vicious inflation cycle that has left consumers
impoverished and the economy in deep crisis.                    In a statement on Thursday, Reserve Bank of Zimbabwe governor Gideon Gono
said as inflation spiraled, the economy shrunk six percent in 2007, painting
a dismal picture that – were it in other countries – would have meant
certain defeat for Mugabe’s government in elections set for March 29.                     “At an annual rate of 26, 470.8 percent, in November, 2007, inflation
continues to be arguably the most devastating macroeconomic imbalance in the
country, as its adverse effects are cutting across all sectors,” Gono said.                Inflation was pegged at 7 982.1 percent in September.     The government withheld inflation figures for October, in a move observers
interpreted as meant to shield the Harare administration from embarrassment
for its failure to stem runaway inflation, which has come to symbolise the
country’s unprecedented economic meltdown.                   Gono, who hiked interest rates to 1 200 percent from 975 percent, said
rising inflation meant the central bank would have to constantly realign
interest rates in order to “discourage speculative borrowing and
inflationary credit expansion.”          “The economy is estimated to have declined by about 6 percent in 2007. This
contraction in economic activity has been mirrored in output decline in all
sectors of the economy with the exception of a marginal increase in
agricultural output,” added the RBZ chief.                         Gono, tasked by Mugabe to lead Zimbabwe’s economic turn around, urged his
compatriots to produce more food this season, disclosing that the RBZ
imported food worth $142.2 million in 2007, up from $114.2 million the
previous year, to bridge gaps from domestic output.           Zimbabwe, once a regional breadbasket, has grappled food shortages since
2000 when Mugabe launched his haphazard fast-track land reform exercise that
displaced established white commercial farmers and replaced them with either
incompetent or inadequately funded black farmers.             An estimated four million Zimbabweans or about a third of the country’s 12
million population are in need of food aid this year, according to
international relief agencies.           Chaos in agriculture because of farm seizures also hit hard Zimbabwe’s once
impressive manufacturing sector that had depended on a robust farming sector
for orders and inputs.                      Most of Zimbabwe’s industries have since the beginning of farm seizures
either scaled down operations to about 30 percent of capacity or shut down
altogether, in a country where unemployment is more than 80 percent.              Essential medicines, fuel, electricity, hard cash and just about every basic
survival commodity is in short supply in Zimbabwe whose economy is estimated
to have shrunk a total 30 percent over the past eight years.                            Mugabe, in power since 1980 and seeking another five-year term in March,
denies mismanaging Zimbabwe, and in turn accuses Western opponents of his
land reforms of sabotaging the southern African country’s once brilliant

Post published in: News

Leave a Reply

Your email address will not be published. Required fields are marked *