World record inflation ravages Zimbabwe

By Lance Guma
18 October 2007

The country’s official inflation figure rose to a new world record high of 7,982.1 %. Going by disputed figures from the Central Statistical Office released on Wednesday this is an increase of over 38% from August. Food and clothing are said to have gone up 20,8 and 11,9 % while housing, water, electricity and household fuels jumped up 179 %. A 171 % rise hit the communications industry while the education sector, dominated by intense student unrest, saw a massive 502 % rise. But those running businesses in the country put inflation at over 20,000% based on their company accounts.

Analysts confirm the crisis has been created by bad political decisions that have played havoc with the economy. A 7-year land grab campaign has brought commercial agriculture to a standstill, the World Bank and International Monetary Fund suspended aid over several issues including corruption and bad economic management by government. Other countries in the international community withdraw assistance packages in protest at human rights abuses. Much of Zimbabwe’s industry has been forced to relocate to more stable countries and this has contributed to unemployment levels that are now well over 80 %.

Mugabe’s increasingly desperate regime has adopted several fire-fighting strategies in a futile attempt to try and stem the fallout. This has included a controversial price and wage freeze policy, soon abandoned when it became clear it was not working. The state media machine tries to conceal the real causes for the economic nightmare, but empty supermarket shelves and dry filling stations tell their own story. No water in homes and constant power cuts are also daily reminders that the problems are not going away and solutions remain in short supply from a government more interested in preserving its power base, than helping suffering people.

From Harare our correspondent Simon Muchemwa provided a breakdown of some of the prices people have to contend with if they are lucky enough to find the goods they want. Cooking oil Z$2,5m up from Z$300 000, bread Z$500 000 up from Z$250 000, soap Z$1,5m from Z$300 000, a kilogram of salt has gone up from Z$200 000 to Z$600 000. A 2 kg bag of rice has shot up from Z$430 000 to Z$2,5m. Most other products have simply doubled in price.

Businessman Eddie Cross explained that government was printing too much money and this was fuelling inflation. He likened the printing to the pouring of water into a ‘Mazoe’ concentrated drink. ‘The more water you pour in, the weaker the solution becomes.’ He dismissed Mugabe’s arguments that sanctions were hurting the economy arguing that 70% of Zimbabwe’s exports were destined for Europe and the United States. The sanctions remain targeted at members of Mugabe’s regime and not the entire country.