Mugabe threatens businesses & Gono promises cash for Christmas

By Tererai Karimakwenda
13 December, 2007

In a speech at the ruling party’s Open Congress in Harare on Thursday, Robert Mugabe threatened another crackdown on businesses, accusing them of overcharging and pursuing super profits. Mugabe reportedly said businesses must remember the customer is king, and warned anyone overcharging that government would be forced to take a tough stance.

Meanwhile the Reserve Bank Governor Gideon Gono According to a report in the state-controlled Herald newspaper on Thursday, Gono reportedly said the current cash shortages that have seen Zimbabweans sleeping in bank queues would be resolved before Christmas. But according to the government’s Herald newspaper, Gono did not spell out the details of this solution.

Njabulo Ncube, political editor for the Financial Gazette, was at the Congress on Thursday. Asked if Mugabe took any responsibility for the effects of his policies, particularly the price controls, Ncube said it was quite to the contrary. Mugabe insisted whatever actions the government has taken, they were meant to cushion the people from high prices.

The Fingaz editor interpreted Mugabe’s comments as “populist”. He said: “To me at the end of the day it sounded like he is setting the tone for his election campaign. He is appealing to the masses. His eyes are actually firmly on the harmonized elections.” According to Ncube, Mugabe complained that he is spending sleepless nights thinking of the millions of Zimbabweans who may turn against him if they are unhappy about inflated prices.

Experts and critics say it is Mugabe who has abandoned the people through economic policies that have destroyed the economy. They point to the ongoing price controls that were instituted by government earlier this year as the main reason why inflation has accelerated at an unprecedented pace. The economic meltdown began in 2000 with state sponsored and illegal farm invasions that destroyed agriculture and deprived the nation of much needed foreign currency and staple foods.

Back in June businesses were ordered to reduce their prices by 50% and soon after price controls were introduced. This led to hoarding by the rich who are then selling the products on the black market at extremely inflated prices. The country’s inflation rate is estimated to be over 15,000%, the highest in the world. Shortages and businesses closures continue as the government refuses to abandon the controls.

As for the Reserve Bank Governor Gideon Gono, Ncube said Mugabe told his party Congress that Gono would brief them on the solution to the current cash crisis. But according to a report in the state-controlled Herald newspaper on Thursday, Gono said the cash crisis would be resolved before Christmas. He is quoted as saying: "A practical solution is on its way very soon and before the festive season. Let us not despair, for failure can never be a viable option for us as a people. The destiny of our future is squarely in our hands.”

Gono did not however spell out the details of this solution. The RBZ chief has previously indicated that new notes will be introduced and those who fail to turn in their old money within a short prescribed period would lose it.