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Business \| African Business

Crisis-hit Zim rolls out Z$10-billion note

HARARE, ZIMBABWE Dec 19 2008 12:08

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Zimbabwe's central bank has introduced a Z$10-billion banknote, worth $20 on the black market, to try to ease desperate cash shortages, state-run media said on Friday.

Prices are doubling every day and food and fuel are in short supply in Zimbabwe. A cholera epidemic has killed over 1 100 people and deadlock between Zanu-PF leader Robert Mugabe and the Movement for Democratic Change (MDC) has put hopes of ending the crisis on hold.

Hyper-inflation has forced the central bank to continue to release new banknotes which quickly become almost worthless.

New Z$1-billion and Z$5-billion notes were also put into circulation and the monthly cash withdrawal limit was increased five-fold to Z$10-billion.

"The increase in cash withdrawal limits is set to go a long way in improving workers' access to their money," the Herald said.

But previous issues of new banknotes have done little to curb the cash crunch faced by Zimbabweans, who often line up for hours outside banks to withdraw barely enough to buy a loaf of bread.

Critics blame the economic meltdown on mismanagement by Mugabe's government, including the seizure and redistribution of thousands of white-owned farms. The once thriving agricultural sector has fallen into ruin.

The 84-year-old Mugabe, in power since independence from Britain in 1980, says Western sanctions are the main cause of the economic crisis and worsening humanitarian picture.

Political analysts say the establishment of a unity government between Zanu-PF and the opposition MDC is the best hope of reversing the economic slide and worsening humanitarian crisis.

CONTINUES BELOW

But power-sharing talks have reached deadlock over the control of key ministries in the government.

MDC leader Morgan Tsvangirai accuses Mugabe of trying to assign the MDC a junior role. -- Reuters

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I am an American of African descent. I have read this paper for a number of years with great pleasure. I have been following the events in Zimbabwe for a number of years. I realize that there are many considerations. As an outside observer I must say that Zimbabwes' actions are beginning to reflect on the entire continent. It is very hard to say this but it appears as if this is starting to play into the hands of those who would accuse us of a basic incompetence. An epidemic? $5 billion dollar notes? I am not one of them but it hurts to hear anyone imply that colonialism did a better job.You will never know the pain I feel writing these words. Inertia and Pride must be struggled against more successfully. I know that these events will be put right. I only beg you to hurry.
Love, your distant cousin.

mark springer on December 20, 2008, 12:54 am

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