Zimbabwe bank head admits 'nation broke'
The head of the Zimbabwe state central bank acknowledged his nation is broke and said foreign currency desperately needed for fuel and spare parts was going on food imports, according to reports today.
Reserve Bank governor Gideon Gono told a panel of politicians that many black farmers, including politicians, who resettled on former white-owned farms, were failing to produce food.
“There are some people who have become professional land occupiers, vandalising equipment and moving from one farm to another,” Gono told a parliamentary committee on home affairs, according to the daily Herald, a government mouthpiece.
Under President Robert Mugabe’s land reform programme, at least 5,000 white-owned farms have been seized with virtually no compensation since 2000. Many are derelict.
Mugabe was on a state visit to long-time ally Namibia, where hundreds of people took to the streets with signs that read “Go Mugabe Go” and “Go Home Dictator.”
“President Mugabe is a dictator who is guilty of several human rights abuses and to a certain extent war crimes,” said Phil Ya Nangoloh, the executive director of the National Society for Human Rights. “He is an international pariah. He is not welcome in Namibia.”
Mugabe also faces growing unrest and strikes at home. Last week police placed a three-month ban on demonstrations.
Gono said he received desperate calls daily from government enterprises – food distributors, the state petrol procurement agency, the loss-making national airline, the state railway company and main power utility – demanding hard currency for imported materials, the Herald reported.
He said officials from the power utility called saying: “If you don’t give us money the nation will be in darkness.”
Gono said the central bank’s priority was to allocate hard currency for imports of corn, the staple, to avert a looming food crisis, especially in southern Zimbabwe. Currency was diverted from almost every government department to buy food, he said.
The committee chairman, ruling party politician Claudius Makova, said its investigations showed the Zimbabwe police needed more than 15,000 vehicles but had just 3,000, of which half were off the road, awaiting repairs and spare parts.
Makova said the nation’s passport office ran out of imported materials to produce passports and identity cards and had resorted to issuing emergency travel documents on sheets of paper. It faced a 300,000 backlog in passport applications and renewals.
The Air Force did not receive the money it needed to keep its planes running.
Tobacco exports, tourism and mining were the nation’s main hard currency earners before the land seizures. Tobacco production this year is forecast at one-fifth of the 1999 level and food output is at one-third.
Official inflation is nearly 1,600%, the highest in the world. Zimbabwe is facing acute shortages of food, petrol, medicine and other essential imports. Power and water shortages occur most days.
In the past month alone, prices of many household supplies have doubled and the International Monetary Fund has forecast official inflation at 4,000% this year.
Earlier this month, Mugabe fired Finance Minister Herbert Murerwa, who had spoken out against flooding the crumbling economy with freshly-printed money that pushed up inflation.
Gono told politicians that hard currency earnings were a tiny fraction of the €1.85bn – €2.59bn needed “for the economy to function well.”
“If we were talking about local currency, I would say: Don’t worry, in the next 30 minutes we will print money,” Gono said, according to reports.
