Harare Prints Z$680 Trillion

Harare Prints Z$680 Trillion

HARARE - President Robert Mugabe's government printed Z$680 trillion to meet massive salary increments to restive civil servants this month and to fund i


 

The sources, who are senior figures at the Reserve Bank of Zimbabwe (RBZ), said the government ordered the central bank to provide $166 trillion to quell a teachers’ strike for more pay that was threatening to spread to include other equally disgruntled state workers and in the process overshadow the government’s campaign to remain in office.The administration requested another $514 trillion to purchase buses, tractors, motor cycles, combine harvesters, generators, small farm implements and cows that Mugabe has distributed to beneficiaries in recent weeks, in what analysts have said was a clear attempt to buy support ahead of elections. As of February 29, the central bank had advanced $514 trillion to the government for the farm mechanization programme and its recurrent expenditure, said an RBZ official who declined to be named for professional reasons. Between February 29 and March 7, the RBZ delivered $166 trillion to the government to meet the salary increments for civil servants, added the official. Public school teachers, who had boycotted classes since February, only returned to work two weeks ago after the government hiked their salaries and those of other civil servants by more than 800 percent. The increments were unbudgeted. Mugabe, who told a campaign rally last Tuesday that the salary hikes were necessary to defeat a plot by business to increase prices and cause more hardships among Zimbabweans in order that they vote against his government, also raised allowances for traditional leaders who have backed his administration. Efforts to get comment from RBZ governor Gideon Gono were in vain yesterday as his office said he was outside the country. But Gono, accused by critics of keeping the printing machine running to prop up an unpopular government, has in the past said he would print money if it were needed to fund national projects. However, economists and the International Monetary Fund (IMF) blame Gono for compounding Zimbabwe’s economic crisis through quasi-fiscal activities that have seen the central bank pump trillions of dollars into financing the government’s populist projects. They say printing money was fuelling inflation, which at more than 100 000 percent is the highest in the world. Mugabe’s government faces what analysts say is probably its toughest electoral test in the combined presidential, parliamentary and local government elections on March 29, which take place amid one of the worst recessions and food crises in the world outside a war zone.

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