Zimbabwe Tops Astronomical Inflation Figures

By Elisha Shamba : Zimbabwe’s rate of inflation shot to over 11 million percent in June, the nation’s Central Statistical Office (CSO) stated.

Last week one of the country’s leading banks, Kingdom, said the country’s inflation rate
was more than 20 million percent. The bank predicted tougher times ahead of Zimbabwe in the absence of donor support and foreign investment.

A sharp rise in inflation in June coincided with campaigning for the June 27 run-off vote which MDC’s Morgan Tsvangai withdrew, citing violence which he said killed over 120 of his party’s supporters.

Starvation looms

Once considered a regional economic model, Zimbabwe has been in the throes of economic meltdown since the country embarked on a chaotic land reform programme that has decimated its agriculture. Zimbabwe’s overall maize production for 2008 is estimated to drop 28 percent lower than last year’s already low levels.

The World Food Programme (WFP) estimates 83 percent of Zimbabweans are living on less than two US dollars a day and that 45 percent of the total population is malnourished. The WFP and the Food and Agriculture Organisation (FAO) estimate that four million people- more than a third of 11.8 million Zimbabweans will need food assistance by next year. Eighty percent of the population are living below the poverty threshold, often skipping meals and walking long distances to stretch their income.

‘Economic emergency’

Reserve Bank governor Gideon Gono earlier this month called for a six-month freeze on prizes and wages in a bid to reign in spiralling inflation.

“Zimbabweans must realise that the country is in a practically building sated of socio-economic emergency. As such there is need for a universal moratorium on all incomes and prices of a minimum period of six months” he said.

The country’s Finance Minister Samuel Mumbengegwi confirmed the new inflation figures but insisted other countries in the region were also suffering.

He said, “While our case has been aggravated by the illegal sanctions imposed by the Western powers, rising food prices are a world phenomenon because of the use of bio-fuel.”

Help form relatives abroad

According to central bank figures, remittances form Zimbabweans living abroad shot up by 226 percent to 45 million US dollars in the first six months of this year, compared with the same period last year. Long queues to pick up hard currencies such as the South African rand and the US dollar at the Zimbabwe’s money transfer agencies mean that the cash often runs out.

An estimated four million Zimbabweans are said to be living outside the country, many of them in neighbouring South Africa, Botswana, Mozambique, UK , US , Canada and Australia.

A regional summit of southern African leaders in Johannesburg at the weekend failed to bring ruling party Zanu PF and opposition MDC to a settlement which is needed to tackle the nation’s urgent social and economic problems.