MUGABE . . . Warns business to behave or face state of face emergency.

HARARE – Zimbabwean President Robert Mugabe on Wednesday warned that his government might have to declare a state of emergency in order to contain an economic crisis that has seen prices rise on a daily basis while inflation has shot to 2.2 million percent, the highest in the world.

Mugabe, who has in the past accused the mainly white-controlled business sector of colluding with his Western enemies and hiking prices in order to incite civil revolt against his government, warned business to be “disciplined and charge affordable prices” or face a state of emergency.

He said: “The time has come for us to be disciplined and to charge prices that are affordable. Do not drive us further than you have done in the past.

“We will impose emergency measures under a state of emergency. We do not want to place our country under a state of emergency where we will tell you what price to charge and nothing else. In a state of emergency rules can be tough and we have to say take care. We might have to do that, so please take care.”

Mugabe said he was committed to power-sharing talks with the opposition Movement for Democratic Change (MDC) party aimed at resolving his country’s crisis. But he accused Britain and America of meddling in Zimbabwe’s affairs and of trying to mislead the United Nations into imposing sanctions against the southern African country.

He said: “They (US and British governments) are dishonest, hypocritical . . . they never tell the truth and lie openly about our situation. They wanted to invoke UN Chapter 7 which applies to countries which are a threat to world peace. Are we a threat to world peace?”

Mugabe was speaking in Harare after Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono announced that he would on August 1 introduce new currency as well slash 10 zeroes on bearer cheques.

Bearer cheques are promissory notes first introduced by the RBZ at the height of cash shortages in 2003. They function the same as actual money. 

Gono said: “With effect from 1 August 2008, all monetary valuations have been re-denominated by a factor of 1:10 000 000 000 which effectively means the removal of ten (10) zeros from all monetary values. What this means is that $10 000 000 000 (ten billion dollars, therefore will translate to $1 (one revalued dollar) with effect from 1 August, 2008.

“With effect from 1 August, 2008, the RBZ is issuing new currency, in the following new revalued denominations: $500 note, $100 note, 25 coin, $20 note, $10 note and coin, $5 note and coin.”

The new currency will eventually replace bearer cheques, which Gono said would be taken out of circulation by December.

Zimbabwe, which was once a model African economy is in the grip of an unprecedented recession that in addition to hyperinflation is also dramatised by shortages of food, rising unemployment and poverty. 

Western governments and the opposition MDC party blame Mugabe, who has ruled Zimbabwe since independence from Britain in 1980, for ruining the economy through repression and wrong policies such as his farm seizures that have led to food shortages mainly due to failure by new black farmers to maintain production on former white farms. 

Poor performance in the mainstay agricultural sector has also had far reaching consequences as hundreds of thousands have lost jobs while the manufacturing sector, starved of inputs from the farming sector, is operating below 30 percent capacity. 

Mugabe denies ruining the economy and instead says his country’s problems are because of sanctions and sabotage by Britain and its Western allies opposed to his land reforms. – ZimOnline.