Rush For Foreign Goods Sinks Zimbabwe’s Dollar

HARARE — Zimbabwe’s dollar lost more than half its value on the black market this week as residents rushed to buy foreign currency to ship in food from abroad because of local scarcity.

The currency also plunged with the government boosting spending ahead of the March 29poll in which President Robert Mugabe is seeking to extend his 28-year rule.

The US dollar changed hands at Z$55m yesterday, against Z$35m last week, said dealers including Jonah Mushingaidze, who trades foreign exchange illegally at Harare’s Roadport bus terminus.

Zimbabwe’s dollar is pegged officially at Z$30000 to the greenback. “People are nervous and desperate for foreign currency,” Mushingaidze said.

“They are worried about the election, and they’re worried about finding enough money to buy food in neighbouring countries.”

Zimbabwe has the world’s highest inflation rate and the fastest-shrinking “peacetime” economy, following failed economic policies linked to political expedience, including Mugabe’s land redistribution programme which started in 2000.

The government is “attacking the market and mopping up every cent of foreign currency it can find to pay for a semblance of normality ahead of the election”, independent economist John Robertson said in Harare.

In January, inflation hit 100580% amid shortages of basic commodities. A loaf of bread costs Z$15m in Harare supermarkets, or Z$500 at official exchange rates, says John Tonganyika, an illegal currency trader in the city.

Two shop owners were arrested this week for refusing to apply price controls.

Meanwhile, the number of registered voters increased by more than 300000 to nearly 6-million, chairman of the Zimbabwe Electoral Commission George Chiweshe was quoted by the state-run Herald newspaper as saying.

He said there were now 5934768, up from 5612464 in December.

The names were added between December and February 14.

Mugabe’s government on Tuesday amended electoral laws to allow police into polling stations to “assist” illiterate people to vote, state radio said.

* Business Day