Zimbabwe faces economic meltdown

Zimbabwe faces economic meltdown

GIDEON Gono

• Gono's economic plan crumbles as inflation shoots up

• Patrick Mlambo: A 100 reasons why Gono should resign

• Gono wants white farmers back

• Central back chief admits failure

• Gono revises inflation target 100 percent upwards

• Gono's 'sleepless nights' over inflation

• Gono fighting a losing battle

• Gono, the Zimbabwean Napoleon

• Patrick Mlambo: The small minds in charge of our economy

• Chido Makunike: Overcoming the 'Messiah Complex'

• Zimbabwe dollar depreciates by 4 percent

• Inflation accelerates once again

• Gono predicts inflation to fall to 20%

• Zim fools no-one with 9% unemployment claim

• Zim claims on lowered inflation unconvincing

• House prices bite Zimbabwe's poor

• Reserve Bannk cautions against paying ex-political prisoners

• $200bln windfall for ex-political prisoners

• Zimbabwe's inflation seen dipping to 160%

By Staff Reporter

RESERVE Bank governor, Gideon Gono, has told President Robert Mugabe that Zimbabwe faces economic meltdown within a month if a financial rescue package is not found.

Gono's surreal warning has led to Mugabe flying off to China, his deputy, Joyce Mujuru, visiting Iran and Finance Minister Herbert Murerwa being sent scurrying to South Africa -- all looking to borrow billions of dollars to steady the country's weak economy.

A senior government source said: "There is no masking this one, Zimbabwe's economy is failing and the government has no money. Gono held a series of meetings with Mugabe and his advisers where the President was left in no doubt that the country will be ungovernable if nothing was done within the next 30 days."

Despite a raft of economic recovery plans drawn up by Gono, Zimbabwe's inflation has not slowed down. In June, year-on-year inflation rose by 19.9 percent, up from 15 percent in May, representing total inflation of 164.3 percent.

A delegation led by Finance Minister Herbert Murerwa and Foreign Minister Samuel Mubengegwi went cap in hand to South Africa on Sunday this week to seek an urgent R6,5-billion (about US$1 billion) loan to buy fuel, food, seed and fertiliser.

The World Bank and the International Monetary Fund are preparing to summarily call in Zimbabwe's debt of R4,5-billion next week.

President Mugabe first made the appeal to South Africa when he met Deputy President Phumzile Mlambo-Ngcuka during her visit to Zimbabwe on Tuesday last week.

Mugabe was told that any help from South Africa would be subject to "strict pre-conditions", according to the South African City Press newspaper.

The conditions included that the so-called "cleaning up" operation, which had already left at least 400 000 Zimbabweans homeless, be stopped.

An unnamed senior government official was quoted as saying that Mlambo-Ngcuka's visit had been aimed at finding out what Zimbabwe intended to do and how South Africa could help.

"We also wanted to see what conditions could be imposed, should South Africa agree to render aid," the South African official said.

Murerwa's delegation which arrived in South Africa on Sunday was expected to meet Finance Minister Trevor Manuel and South African Reserve Bank Governor Tito Mboweni.

Zimbabwe is saddled with huge debts and has been borrowing from local and international banks, individuals and other African states.

Just last week, the Netherlands Bank, ING announced it was going to court to recover 32 million euros borrowed by the Zimbabwe government in 1994 to finance the digitalisation of the country's telephone network.

Zimbabwe's fuel situation remains dire, and the foreign currency inflows have dried up owing to low production output, and the sophistication of the parallel market which now has the lion's share of forex deals.
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