When the cops are the robbers

Photo: IRIN

Police moonlight as criminals

(IRIN) – The demise of the all-but-worthless Zimbabwe dollar and its replacement with foreign currency is being mirrored by a rise in violent crime, perpetrated particularly by police officers.

Rampant inflation, unofficially estimated at trillions of percent annually, saw the local currency withdrawn from circulation in April 2009 and officially replaced by foreign currencies, such as the South African rand, Botswana pula and US dollar.

A serving Zimbabwe National Army officer, who declined to be identified, told IRIN that junior soldiers and police officers were being driven to crime by desperation, as they suffered the same economic hardships as most of the population. However, unlike non-uniformed Zimbabweans – 94 percent of whom are thought to be unemployed – soldiers and police, like all public servants, enjoy a US$100 monthly wage.

“They have observed how senior security officers drive luxury cars, get free fuel for their multiple farms, and other benefits. Soldiers and police officers have no other skills which they can use to raise extra money – all they can do is to use guns, but when they get used to that lifestyle, they can easily become warlords,” the army officer said.

“From a security point of view, what this means is there are underground armies, which can even be a danger to national security because nobody knows how many there are, and how many weapons are in their hands,” he commented.

In late 2008, at the height of hyperinflation, soldiers embarked on a looting spree in the capital, Harare, over poor pay and non-payment. They were being paid in local currency, but maximum daily bank withdrawals were pegged at Z$500,000 (US$0.25). Soldiers also attacked Roadport, a regional bus station in Harare used by money changers, and robbed them of local and foreign currency.

Expensive goods

Political journalist Dumisani Muleya told IRIN that since the beginning of 2009, local newspapers have been awash with headlines like: “Four detectives face robbery charges”, and “Bank Heist: Two cops in court”, which illustrated the trend among security force personnel to resort to crime.

The dollarized economy has made goods and services more freely available, but at high prices, which was “causing some rogue elements within the security … [forces] to use armed robbery as a way of raising extra income … and that creates a climate of insecurity and instability,” he said.

The numerous wars fought in the region, such as in the Democratic Republic of Congo and neighbouring Mozambique, have made it easier for criminals to access weapons, as have the policies instituted by President Robert Mugabe’s government prior to the power-sharing deal that led to the formation of the unity government in February 2009.

Giles Mutsekwa of the Movement for Democratic Change (MDC), who heads the home affairs ministry with a counterpart from ZANU-PF as part of the deal, told IRIN that rogue elements were using government-issue guns to commit armed robberies, but the government was “getting on top of the situation, and there is no need for the population or visitors to get worried”.

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Shops shelves fill up but customers stay away

(IRIN) – The demise of Zimbabwe’s local currency, the Zimbabwe dollar, and the reappearance of goods on the recently barren shop shelves is an equation that ensures the status quo: ordinary people are unable to feed themselves.

Foreign currency, whether US dollars, South African rands or Botswana pula, is the price paid for stocked shops, but at the Domboshava shopping centre, a rural outpost about 40km northeast of the capital, Harare, there are few customers.

Tendai Shava moves from shelf to shelf admiring the goods, mostly imported from neighbouring South Africa, holding a soiled R20 note (worth about US$2) as she weighs her options.

“I need to buy cooking oil and sugar but I do not have enough money; I only have enough money to buy sugar or cooking oil. I have no idea where the government thinks we ordinary people in rural areas can get foreign currency, since all goods are now sold using this money from South Africa and America.” In the end, she settles on cooking oil and shuffles from the shop.

Next door there is a small store selling a variety of goods, but the two assistants spend their time playing board games. “The use of foreign currencies as legal tender has really affected the local people because they have no access to foreign currency,” one of the assistants, Dudzai, told IRIN. “Where does the government expect the villagers to get foreign money when it is battling to pay its own civil servants?”

Zimbabwe’s unity government has suspended the use of the local currency for a year, but its death knell was sounded long before with an inflation rate estimated at trillions of percent ensuring its demise.

The Zimbabwe dollar became a symbol of President Robert Mugabe’s rule: an ailing economy, unemployment estimated at 94 percent, collapsed infrastructure and social services, and more than half the 12 million population relying on emergency food aid.

The official sanctioning of foreign currency meant the Zimbabwe dollar was on borrowed time, but now an even older method of determining the value of goods and services is fast becoming the favoured currency in rural areas.

The barter economy

“What we have experienced over the last few months is an increase in barter trade. For example, a villager with many goats can swap a goat in exchange for several packets of sugar and salt or any other commodities that they may need,” Dudzai said.

But the practice of bartering in rural communities is being undermined by those with access to foreign currency. “The biggest culprits are people from urban areas, who are exploiting the rural farmers by paying them very little foreign currency for grain and livestock,” she said.

The economics minister in the new unity government, Elton Mangoma, noted while announcing the suspension of the local currency: “The Zimbabwe dollar will be out for at least a year. We resolved that there will be no immediate plans to introduce the money because there is nothing to support and hold its value.”

In Harare’s affluent suburbs, access to US dollars and South African rands have brought supermarkets that stay open for 24 hours to serve meandering queues of shoppers, mainly NGOs and government employees.

“Some of our regular clients spend as much as US$300 on their weekly shopping trips and they don’t seem to worry about how much they spend,” a supervisor at one of the Harare supermarkets told IRIN.

Wellington Chibhebhe, secretary-general of the Zimbabwe Congress of Trade Unions, told IRIN the union federation was demanding that all workers be paid a Poverty Datum Line (PDL) wage of US$454 a month.

As part of the unity government’s attempts to resuscitate the economy, public servants are paid a monthly wage of US$100, or its equivalent in vouchers. “We campaigned to have all employers, including the government, pay workers in foreign currency, and now we want them to peg salaries against the PDL,” he said.

“Through our campaigns, pensions will now be paid in foreign currency. We are aware that for the non-working rural citizens, it is taking long for foreign currency to trickle down to them. The fact of the matter is that under the current slave wages, people are scrounging for food in both rural and urban areas.”

Poverty for a few dollars more

The redundancy of Zimbabwe’s local currency and the officially sanctioned use of foreign currencies is increasing poverty levels in rural areas, where most of the population live.

Transactions for services and goods are mainly being conducted in foreign currency, particularly US dollars, South African rands or Botswana pulas, after the Zimbabwe dollar crumbled in the face of a trillion percent hyperinflation rate.

Photo: Wikimedia Commons

Foreign currency has dominion

Although the Zimbabwe dollar remains in circulation – with the highest denomination a Z$100 trillion note – it is shunned by shops, transport services and consumers because of its constant devaluation, and providing change to complete a transaction is a challenge.

“Dollarisation has inevitably spread to rural communities, most of which have until recently been unable to tell the rand from the pula, and that is worsening poverty in those areas,” Innocent Makwiramiti, an economist and former chief executive officer of the Zimbabwe National Chamber of Commerce (ZNCC), told IRIN.

“Given that foreign currency was being used minimally in most rural areas, unlike in towns and cities, it is not easy for people from those communities to adjust. The majority of them are encountering problems sourcing the foreign currency to buy commodities and paying for essential services,” he said.

In the last five years, an economy already in recession contracted by 45 percent and unemployment reached 94 percent, according to a report by the UN Office for the Coordination of Humanitarian Affairs (OCHA).

The foreign currency available to most people is usually remitted by the estimated three million or more people who have left Zimbabwe in search of work in neighbouring states or further afield in Britain and even Australia.

John Robertson, an independent economist based in the capital, Harare, commented: “Rural populations have to depend largely on the money remitted to them by relatives and friends living outside Zimbabwe and, to some extent, breadwinners who can generate it in urban areas.

But, given the fact that the economies of most of the countries that Zimbabweans have gone to as economic refugees are in recession, the future is bleak,” he told IRIN.

“Dollarising an economy that for about a decade has not had any foreign currency worth talking about in the formal financial sector, tends to make the population poorer, and the situation is going to be worse in rural areas, which have been more vulnerable than urban communities during the economic meltdown.”

Those formally employed – about 480,000, down from 3.6 million in 2003, according to the OCHA report – were paid in the local currency, putting goods and services sold in foreign currency out of reach.

Stella Makore, 54, a widow from Chirumanzu, a rural district in Midlands Province, travelled about 360km to Harare to get foreign currency from her eldest son, Tichafa, after borrowing US$10 for the bus fare from a local shop owner.

“It is as if the Zimbabwean dollar no longer exists. Every commodity you intend to buy is now sold in foreign currency, and most of us just stare at the items in the shops because we don’t have the money to buy them with,” she said. “Even those selling wild fruits picked from the forests by the roadside are demanding foreign currency.”

Nearly seven million people are in need of food aid, and a shortfall in donor funding has seen rations for the recipients reduced to less than half the recommended monthly minimum.

“I bartered my goat for 50kg of maize grain but have been keeping it at home because the miller demands a payment of US$2 to grind it into mealie-meal [maize-meal], since I did not have the money,” Makore told IRIN.

“Very soon, most villagers will be left without livestock, since they are being forced to sell their goats, sheep and cattle at give-away prices to the traders and shop owners who have foreign currency.”

Makore’s other son left their home in Chirumanzu to engage in illegal gold panning in Shurugwi district, also in Midlands. His absence, despite the possibility of quick riches, has created a quandary for her because she now has no-one to help her tend the fields. Her eldest son, Tichafa, 32, a car salesman in Harare, has little foreign currency to spare.

“I have just paid US$600 demanded at my children’s school, leaving me completely dry,” said Tichafa, who raised the foreign currency from sales commissions. “I don’t even know when I will be able to get the money to send my mother back home.” – IRIN

Inflation at 6.5 quindecillion novemdecillion percent

(IRIN) – The Zimbabwe dollar now seems to have lost all its appeal, and calls for the adoption of a foreign currency to replace the struggling monetary unit and put an end to the country’s crippling hyperinflation are becoming louder.

“We have to accept the economy has been ‘dollarised’ and all companies should be registered to trade in hard currency,” Obert Sibanda, president of the Zimbabwe National Chamber of Commerce, told the state-run The Herald newspaper on 19 January.

Dollarisation, or the use of a foreign currency – not necessarily the US dollar – in parallel to, or instead of, the domestic currency, has long been a daily reality for most Zimbabweans. Record-breaking inflation has made them reluctant to accept the local currency, preferring either to trade in a more stable currency, or to barter.

Photo: Wikimedia Commons

The new Zim dollar

They could not get their hands on their Zimbabwe dollar savings and salaries even if they wanted to – banks have been limited by law to a ceiling on withdrawals that no longer covers the cost of a loaf of bread.

The US dollar and South African rand are in use across the country, while Botswana’s pula is favoured in Bulawayo and the west of the country, the Zambian Kwacha is used in the northern areas, and the Mozambican metical in Mutare and the country’s eastern regions.

The Reserve Bank of Zimbabwe (RBZ) had already endorsed semi-official dollarisation in September 2008 by introducing ‘Foreign Exchange Licensed Warehouses and Shops’ when some 1,000 retail outlets and 250 wholesalers were permitted to trade in foreign currency.

In a statement released earlier in January 2009, the Zimbabwe Congress of Trade Unions (ZCTU) demanded that “all workers should be paid in foreign currency, given the fact that shops are now selling their goods in foreign currency – even those that have not been licensed to do so.”

The ZCTU was previously opposed to introducing foreign exchange as legal tender, but the reality on the ground has caused it to reconsider. “Workers are even forced to pay rentals and fares in foreign currency … public hospitals can now charge for their services in foreign currency, but the majority of workers who utilise these hospitals do not earn in foreign currency.”

Various reports in the local media this week noted that a draft economic recovery plan, purportedly issued by the RBZ, had said: “It is imperative that Zimbabwe informally adopts the rand alongside the Zimbabwe dollar”, in a bid to stem the rampant economic crisis.

However, RBZ governor Gideon Gono distanced himself from these reports by telling The Star newspaper, a South African daily published in Johannesburg: “The Zimbabwean dollar will not be overtaken by any other currency, formally or otherwise, now or at any point in the future.”

Stop printing money

Zimbabwe’s out-of-control hyperinflation has become the symbol of its unprecedented economic decline, and most people simply treat the two local currencies (original and “revalued”) as beyond salvation.

The monthly inflation rate passed the 50 percent mark – the threshold for defining ‘hyperinflation’- in March 2007; in January 2009 the RBZ issued the world’s first 100 trillion dollar note.

“Since then, it’s gotten much worse,” said Steve Hanke, professor of applied economics at Johns Hopkins University, Baltimore, in the US, and a senior fellow at the Cato Institute, a Washington-based think-tank. The latest official RBZ figure, dating back to July 2008, put year-on-year inflation at more than 231 million percent.

In the absence of credible official statistics, Hanke developed a hyperinflation index for Zimbabwe and in an article in the December 2008 issue of the financial magazine, Forbes Asia, put the annual inflation rate at around 6.5 quindecillion novemdecillion percent – 65 followed by 107 zeros. “Prices double every 24.7 hours,” he noted. “Shops have simply stopped accepting Zimbabwean dollars.”

A report released by the Cato Institute in June 2008 – Zimbabwe, From Hyperinflation to Growth – said the RBZ’s money machine was the source of the hyperinflation. “The government spends, and the RBZ finances the spending by printing money. The RBZ has no ability, in practice, to resist the government’s demands for cash … To stop hyperinflation, Zimbabwe needs to immediately adopt a different monetary system,” the report said.

The RBZ sees itself in a different light, as evidenced by its strategic vision: “to become the financial cornerstone around which Zimbabwe’s economic fortunes and developmental aspirations are anchored … the pursuit of the Bank’s vision will express itself through leadership in the formulation, implementation and monitoring of policies and action plans for fighting inflation, stabilisation of the internal and external value of Zimbabwe’s currency and of the financial system in a manner that gives pride of achievement to Zimbabweans across the board.”

The price of monetary stability

Most economists agree that ditching Zimbabwe’s discredited currency would help pave the way to recovery. “This is an idea we have been suggesting for years. We need to tie up the Zimbabwe dollar with a stronger currency,” Zimbabwean economic analyst John Robertson told IRIN. “We need the confidence in the South African rand to help us out of economic problems.”

According to Dawie Roodt, a government finance expert in South Africa, the benefits to Zimbabwe would be considerable: “First of all, they would be importing the South African inflation rate. The Zimbabwe inflation problem is purely a Zimbabwe dollar issue, so over time the inflation rate would be equal to the inflation rate in South Africa.”

This would mean the adoption of real interest rates, allowing banks to resume lending – essential to kick-start the country’s ailing industrial sector.

The notion of adopting the rand is not new to the region: the Common Monetary Area (CMA) of the rand fixes relative values of the currencies of neighbouring Namibia, Lesotho and Swaziland to the South African unit.

But Roodt cautioned that there was also a downside: “The most obvious [drawback] of using another currency is that you lose control of monetary policy,” and Zimbabwe would also be adopting South Africa’s monetary framework.

The legal tender could also become an issue of sovereignty and national pride, which, he commented, were sensitive matters. “You don’t have the president’s picture on the currency.”

Mugabe Plan B as power-sharing talks collapse

By James Mombe

Zimbabwe’s central bank has proposed adopting neighbouring South Africa’s rand currency and a return to a free market economy, in an ambitious Plan B to pluck the country out of crisis with or without a power-sharing government with the opposition.

Marathon negotiations to salvage a September power-sharing deal ended on Tuesday without agreement on how to implement the pact that many had hoped would launch Zimbabwe on a path to recovery.

“There has been no progress because the very same outstanding issues on the agenda even before the signing of the agreement are the same issues that are creating this impasse,” opposition MDC party leader Morgan Tsvangirai told reporters after the talks that were chaired by South African President Kgalema Motlanthe.

“Not very well,” said Mugabe when asked by reporters how the talks had gone. “The meeting broke down but we will continue to discuss here at home,” he said, adding that the Southern African Development Community (SADC) would meet in due course to try to break Zimbabwe’s political impasse.

A dispute between Tsvangirai and Mugabe over control of key ministries and other top posts in the proposed unity government has left the power-sharing deal near collapse, ruling out prospects of economic recovery anytime soon.

But central bank governor Gideon Gono said in a draft economic reform programme that anchoring Zimbabwe’s shaky dollar with the rand would help stabilise prices and lay the platform for recovery. But he preferred that the adoption of the rand as a unit of account be done informally.

Zimbabweans were already shunning their near worthless currency preferring to transact in rands or American dollars, Gono said, acknowledging collapse of the local dollar that has come to symbolise Zimbabwe’s unprecedented economic meltdown.

“It is imperative that Zimbabwe informally adopts the rand alongside the Zimbabwe dollar, to eliminate distortions associated with the use of multiple currencies,” Gono said in a document drafted this month and which proposes drastic reforms across all key sectors of the economy.

“The randfying of the Zimbabwean economy is envisaged to give substantial impetus to current efforts geared at stabilising prices. This will lay a solid foundation upon which successful economic recovery initiatives will be anchored.”

Zimbabwe stands to benefit during the World Cup tournament to be held in South Africa if it opts to use the rand. In addition, the two countries enjoy strong economic ties, making switching to the rand easier. Adopting South Africa’s currency is also in line with SADC’s push for a single monetary union, according to Gono.

Once Mugabe’s Cabinet agrees to adopt the rand, wages and salaries for civil servants could be payable in the South African currency within a period of six months, Gono said in the document entitled: Comprehensive Economic Reforms Needed to Turn Around the Economy.

Gono, who has been tasked by Mugabe to change Zimbabwe’s economic fortunes – and famous for his “failure is not an option” catch phrase – urged authorities to lift a raft of controls and regulations that analysts say have choked industry and stymied growth.

“The transformation process entails moving away from a regulated economy to one where the interplay of market forces assumes a more central role in the allocation of resources,” Gono said in the document.

It was not clear whether Mugabe – who has frequently interfered with the market and has in the past prosecuted business officials for ignoring state price controls – has seen Gono’s document yet, and if so what was his reaction.

Zimbabwe once boasted one of Africa’s model economies during the early years of independence but now suffers an acute economic and humanitarian crisis marked by world record hyperinflation, severe shortages of food and basic commodities, amid a cholera epidemic that has killed more than 2 000 people since August.

Analysts see little hope of economic recovery in Zimbabwe without a power-sharing government that is acceptable to the international community.

In addition, key Western nations have said they are prepared to bankroll Zimbabwe’s recovery only if Tsvangirai – and not Mugabe – has effective control of power in Harare.

Gono – in his go-it-alone programme – proposes to fund economic recovery through tax revenue levied in foreign exchange, estimating that Harare could raise up to US$1.7 billion annually through customs duty, valued added tax, corporate taxes and royalties from minerals.

Foreign exchange requirements for the government amount to US$350 million per month or US$4.2 billion per year, according to the Reserve Bank of Zimbabwe governor.

Commercial mining of diamonds at the Chiadzwa diamond field in eastern Zimbabwe could raise another US$1.2 billion per month, said Gono. “Royalties from diamonds extracted becomes a key source of government revenue to finance government requirements,” he said.

Gono said in his document that a ruthless army and police crackdown had driven illegal miners off Chiadzwa creating an opportunity for the engagement of experienced diamond mining firms to exploit the field.

“These companies are expected to form a joint venture partnership with the government of Zimbabwe,” said Gono without disclosing the companies willing to mine diamonds in Zimbabwe.

Other major reforms suggested by Gono include carrying out a fresh audit of the government’s land redistribution programme to weed out non-productive black farmers whose land has been lying idle since being resettled there after Mugabe expelled white farmers.

The government will have to ensure inputs for farmers, deregulate marketing of agricultural commodities, while also granting secure but transferable tenure to resettled farmers so they could use it to access funding from banks, according to Gono.

Analysts blame Zimbabwe’s food crisis on failure by Mugabe’s government to provide farming inputs, skills training and funding for black villagers resettled on former white farms.

Gono proposes extensive reform of the mining sector to increase exploration for minerals that could result in development of new mines and increase export earnings as well as job creation.

But the central bank chief is careful to insist on respect of property rights as well as upholding bilateral investment promotion and protection agreements signed with other countries as a way of attracting greater foreign investment in the mining sector.

“The sacrosanct nature of private property rights should be observed in the mining sector, in conformity with best standards and international agreements which Zimbabwe has entered into with its international partners,” said Gono.

Mugabe has threatened to force all foreign-owned mining firms operating in Zimbabwe to cede controlling stake to the government and to local blacks in a programme akin to land reforms and which the veteran leader says is necessary to ensure blacks have a share in the country’s vast mineral wealth.

New and tighter controls would have to be implemented to curtail smuggling of precious minerals out of the country.

These measures, according to Gono, will include placing government agents at mines and refinery plants to “monitor, the production, refining and valuing of precious minerals on site”.  – ZimOnline

Zimbabwe Currency Facing Extinction

By Chipo Sithole

Grocery purchases, public hospital bills, property sales, rent, legal fees, vegetables and even mobile phone recharge cards in Zimbabwe are now paid for in foreign currency as the worthless Zimbabwe dollar virtually ceases to be legal tender.

Once a regional economic model, Zimbabwe is in the throes of an economic crisis, with unemployment running at more than 80 per cent and many families unable to afford a square meal. Stratospheric inflation (officially estimated, in July, to have reached 231 million per cent) and an unstable exchange rate have caused the Zimbabwe dollar to lose both credibility and its value as a trading currency.

However, the government of long-time ruler President Robert Mugabe is too ashamed to admit that it has officially “dollarised” the economy, so the Zimbabwean dollar remains the de jure legal tender of the country, leading to a situation economists term “partial dollarisation”.

Full or official dollarisation is the adoption by one country of another’s currency as legal tender. In the case of Zimbabwe, the US dollar and the South African rand are widely accepted. The adopted currencies have taken over all the functions of domestic currency.

In order to attract foreign currency into the official market, Zimbabwe’s central bank has, since September, licensed at least 1,000 shops to sell goods in foreign currency. The authorities have also recently licensed mobile phone service providers to accept foreign exchange for airtime and other services, and permits public hospitals to receive payment in other currencies.

Other shops and service providers have followed suit, despite warnings that those who flout the country’s foreign exchange regulations will be prosecuted.

Political analysts and economists say the main reason for the government’s failure to admit to dollarisation or partial dollarisation is that the situation is difficult to reconcile with Mugabe’s oft-repeated declaration of his country’s “sovereignty” and frequent “anti-imperialist” outbursts.

“Such a declaration [of dollarisation] would be an embarrassment to a government which professes hatred of the US government,” Lance Mambondiani, an investment analyst, said.

“At a symbolic level, one of the most important national symbols is money, which serves to enhance a unique sense of national identity. The currency underscores the fact that everyone is part of the same social entity,” he said. “These effects are lost when money of a foreign state is adopted. Dollarisation is therefore a greater threat to national sovereignty than any perceived threat of recolonisation by the British.”

There is another problem. Full dollarisation would require the approval of the US Federal Reserve, which is unlikely to be forthcoming, given the animosity between Washington and Harare.

Mugabe accuses the US government and former colonial power Britain of attempting to bring down his government through sanctions imposed in 2001 in response to political repression and electoral theft in Zimbabwe. In turn, Washington accuses Mugabe of having run down a once thriving economy through insane economic policies.

Diplomatic sources say America has asked the Mugabe regime to come clean on whether it has officially dollarised. Sizani Weza, a spokesperson at the US embassy in Harare, maintains, however, that, although he is “aware of public interest in US government approval or disapproval of the use of the US dollar in Zimbabwe” the US government has not “expressed an opinion” on the issue.

“As far as we know Zimbabwe has not officially dollarised. The US dollar circulates in Zimbabwe, as it does in many countries,” he said.

Weza said the US has simply expressed an interest in knowing whether dollarisation is now official policy so it can establish what short-term and long-term returns are due to it.

A senior government official said Zimbabwe had approached South African finance minister Trevor Manuel and South African Reserve Bank governor Tito Mboweni with a proposal that they rescue the Zimbabwean economy by extending the common monetary area of rand into Zimbabwe. It currently encompasses South Africa, Namibia, Lesotho and Swaziland.

Similar proposals have been made by Steve Hanke, Cato Institute Senior Fellow and Professor of Applied Economics at Johns Hopkins University, who advocates the creation of a currency board to end Zimbabwe’s spiralling inflation, and by Tomaz Salamao, executive secretary of the Southern African Development Community, SADC.

Tomaz has reportedly suggested that Zimbabwe’s depleted foreign reserves be topped up with the South African currency and that Zimbabwe be allowed to join the rand monetary area.

The Zimbabwe government, invoking its sovereignty mantra, initially rejected the suggestion, but IWPR has learnt that it has backed down under the pressure of the imploding economy and proposes issuing Zimbabwean dollars that are fully backed by and convertible into rands at a fixed rate.

Under this plan, the currency board will initially be capitalised by South Africa and the rand will be allowed to circulate legally in Zimbabwe.

“The rand would effectively prop up the Zimbabwe dollar,” which has become almost worthless, said a government official.

The ultimate aim would be to stabilise the exchange rate of the Zimbabwe dollar and curb hyperinflation, enabling the country to buy foreign exchange and continue to import essential goods.

According to diplomatic sources, the price of South Africa’s help will be Mugabe’s commitment to a genuine power-sharing arrangement with the opposition in terms of the agreement signed on September 15, 2008, and to far-reaching political and economic reforms.

The power-sharing deal, which, it was hoped, would halt Zimbabwe’s plunge to destruction, has stalled over the allocation of key cabinet ministries.

Source : IWPR (08/01/09)

*Chipo Sithole is the pseudonym of an IWPR journalist in Zimbabwe.