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Zimbabwe suffers worst economic crisis ever



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By Staff Reporter

ZIMBABWE was blighted by probably its worst economic crisis yet this week with chronic electricity and water shortages in the major cities of Harare and Bulawayo.

Doctors and industrial workers were also on strike, with a decision to suspend Zimbabwe from the International Monetary Fund imminent.

The state-owned power company blamed a series of prolonged countrywide blackouts this week on delayed coal deliveries at the Hwange Power Station, equipment breakdowns and interruptions in electricity imports.

Thousands of Harare residencies -- including the plush Borrowdale suburb where Zimbabwe's celebrities and politicians have their homes -- had gone without electricity for close to 20 hours last night.

In Bulawayo, a biting water shortage was felt across most of the high density suburbs, including Entumbane, Lobengula Cowdray Park and parts of Luveve. There were fears of a disease outbreak, with some houses entering the fifth day without water.

The Zimbabwe Electricity Supply Authority's woes are a sign of the devastating crisis gripping what was once one of southern Africa's most prosperous economies.

In a brief statement to consumers, ZESA said Zimbabwe was experiencing 400 to 450 megawatt shortfalls on its daily winter requirement of 2 100 megawatts.

The result has been power cuts in towns and cities at the height of the southern hemisphere winter. Farmers have also been without electricity to operate irrigation equipment at a critical growing stage for vital crops such as wheat.

Several banks and other key industries were shut down on Wednesday.

Political scientist Professor Jonathan Moyo who until recently was a government spokesman described the economic crisis as unprecedented.

"Without warning or effort to inform, we have been plunged into darkness. One would expect these problems during winter when utilisation is high, but we are getting out of winter. This kind of crisis can only happen where the centre is no longer holding," Moyo, who lives in Borrowdale and had gone for 14 hours without electricity told New Zimbabwe.com.

"For anyone who has lived in Africa and seen government transitions, this is the clearest sign yet of not just a ship sinking, but one without a captain. We are engulfed by darkness."

President Robert Mugabe held meetings with his ministers on Tuesday and Wednesday. He also met members of Zanu PF's politburo at the Zanu PF headquarters in Rotten Row.

Also on Wednesday, the South African cabinet committed itself to helping Zimbabwe with a US$300 million loan which Zimbabwe urgently requires to pay the IMF. The load alone is not enough and Zimbabwe will need much more financial help from its Asian allies to ward off a total collapse.

The often-violent seizure of thousands of white-owned farms for redistribution to black Zimbabweans, combined with years of drought, have destroyed the country's agriculture-based economy. Inflation has soared to 164 percent, and Zimbabwe is also suffering critical shortages of food, fuel and foreign currency.

A senior official at the power monopoly denied reports that Zimbabwe has been unable to buy electricity from neighboring South Africa and Mozambique because it lacked the foreign currency.

"We have been importing the maximum accessible power from Eskom in South Africa and HCB of Mozambique but cannot match demand due to the winter peak," Obsert Nyatanga, general manager for corporate affairs, said in an interview with the state-run Herald newspaper.

But he said there has been a disruption in electricity supplies from Congo due to a major generator failure there.

Meanwhile, the key Hwange thermal power station in northwestern Zimbabwe has "ground to a halt" due to generator and boiler failures caused by the lack of currency to import spare parts, Nyatanga told The Herald.

He said smaller thermal power stations in the western cities of Bulawayo and Munyati were supplying only 30 percent of normal output due to a shortage of train cars to deliver coal.

On a state visit to China last week, President Robert Mugabe announced that Beijing has offered to provide two 300-megawatt generators for the Hwange plant on undisclosed terms. A controversial 1990s deal with Malaysia's YTL Power International Bhd. to upgrade the facility never materialized.

In another sign of the country's economic troubles, the black market rate for its currency has reportedly soared to 45 000 Zimbabwe dollars to the US dollar, compared to an official rate of 17 500 Zimbabwe dollars. The British pound is now fetching $65 000 against the dollar.

In a bid to relieve gas stations, where drivers have been waiting in line for weeks to buy fuel that rarely comes, the government is allowing some stations to sell privately imported stocks at US$1 a liter. The first such station opened on Wednesday, state radio reported. State-imported fuel sells for 10 000 Zimbabwe dollars a liter.

Without paraffin to cook and heat their homes, Zimbabwe's poor are resorting to building wood fires. This in turn is aggravating the denudation of the about 5 000 seized commercial farms as their new owners seek to make a quick profit by selling firewood.
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