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Zimbabwe has traumatizing year with inflation rate hitting 8,000%

Zimbabwe has traumatizing year with inflation rate hitting 8,000%

After a year which saw the official inflation rate surge to 8,000 percent, shelves run dry and opposition leaders beaten up, few people in Zimbabwe can wait to see the back of 2007.
While veteran President Robert Mugabe hopes to secure a seventh term of office in elections next year, he is unlikely to trade heavily on his government's recent economic performance.
"In short the last year has been a complete disaster," said Calisto Jokonya, president of the Confederation of Zimbabwe Industries. "All the policies that were put in place did not work. Inflation soared, goods disappeared from the shops, cash also disappeared. This was the year of queues."
When he presented the budget for the coming 12 months a year ago, the then finance minister Herbert Murerwa said inflation which stood at just over 1,000 percent should drop to below 400 percent by September.
A few weeks later Murerwa was out of a job and his forecast was shown to be as worthless as a 100,000 Zimbabwe dollar bill, for come September the year-on-year inflation rate stood at a mind-boggling 7,892.1 percent.
Since that announcement, the government has failed to release an official inflation figure which most economists say is likely to be even higher still.
Evidence however abounded to the sickness of a once-model economy, most notably in June when a government order for retailers to slash prices to less than cost price soon led to a run on supermarkets which then failed to restock.
Central bank governor Gideon Gono later acknowledged Operation Dzikisa Mutengo (Reduce Prices) had backfired and only induced anarchy. "Of what use are cheap goods when they are not available?" Gono said in October.
Thousands of retailers and businessmen who failed to heed the government's pricing directives found themselves in court, many deciding to halt operations after large fines.
An easing of the pricing crackdown may have led to a gradual restocking of shelves, but there then followed a severe shortage of cash with limits on withdrawals resulting in big queues at banks and dispensing machines.
"It (2007) required a certain degree of financial dexterity to survive," said Martin Tarusenga, a consultant with the information technology firm Systemics Consultant. "With all the problems that have come with Zimbabwe's economic crisis, it is surprising that many companies have still managed to pull through 2007."
The economic meltdown was accompanied by a new bout of political turmoil with Morgan Tsvangirai, leader of the main opposition Movement for Democratic Change, among those assaulted as Mugabe's security forces thwarted an anti-government prayer rally in March.
After Western governments expressed outrage over the assaults, Mugabe told them to "go hang" and said the opposition had "asked for it." Mugabe however did however bow to regional pressure, agreeing to South African President Thabo Mbeki as a mediator between the ruling ZANU-PF party and the MDC.
Nelson Chamisa, a spokesman for the MDC, said 2007 was a traumatizing year but that worse could follow if Mugabe was elected for a sixth term.
"2008 will be a watershed year, it has to be the defining moment. There will be no country to talk about if this country goes through another year under the leadership of this regime."


Updated : 2021-01-23 19:50 GMT+08:00