Zimbabwe lifts foreign currency restrictions

January 30, 2009 at 9:35 am | Posted in Senza Categoria | Leave a comment
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ZIMBABWE has scrapped restictions on foreign currency to prop up its ailing economy, as the United Nations warns more than half the population needs emergency food aid.

Hours after grim estimates by UN agencies also showed that just 6 per cent of its population is formally employed, acting finance minister Patrick Chinamasa announced that Zimbabweans can now legally use foreign money alongside the local dollar.

“These currencies include the South African rand, the United States dollar, Botswana pula, euro (and) pound sterling among others,” Mr Chinamasa said, acknowledging the country’s long-established black-market forex economy.

Mr Chinamasa was presenting a 66,500,000,000,000,000,000-Zimbabwean dollar ($2.9 billion) government budget amid world-record hyperinflation last officially set at 231 million per cent.

Fees at state institutions such as hospitals and further education facilities are listed in US dollars, while the country’s power, water and state-run fuel utilities will also take foreign currencies.

A hospital visit for an adult will cost $US8 ($12), a term at medicine school will cost $US1800 and a kilowatt of power is now charged at US98c.

Aside from spiralling prices, ordinary Zimbabweans also face chronic hunger and a runaway cholera epidemic which has killed more than 3000.

The World Food Programme in June estimated that 5.1 million Zimbabweans would need aid by January, but the actual figure has proved to be 35 per cent higher — almost seven million.

“The economic situation has worsened more dramatically than we had anticipated,” WFP regional spokesman Richard Lee told AFP.

The agency is being forced to halve cereal rations so that all in need can receive aid, with food aid being distributed in every district in the country, Lee added.

The UN’s Office for the Coordination of Humanitarian Affairs (OCHA) also warned that, out of the country’s 12 million people, only 480,000 have formal jobs, down from 3.6 million in 2003.

“At close of 2008, only 6 per cent of the population was formally employed, down from 30 per cent in 2003,” the agency said.

Zimbabwe’s economy has shrunk by more than 45 per cent over the past five years, leaving half of Zimbabwe’s urban population relying on cash from friends and family overseas, the report said.

Southern African leaders want President Robert Mugabe and rival Morgan Tsvangirai to share power by mid-February, saying that would offer Harare the best chance to emerge from the country’s multi-faceted crisis.

Feuding political rivals Mugabe and Tsvangirai have failed to agree on a power-sharing deal signed six months ago, after disputed elections last March that saw the veteran leader suffer a first-time loss at the polls.

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