Zimbabwe inflation soars to all-time high

SEATTLE POST-INTELLIGENCER

Saturday, March 11, 2006 · Last updated 2:16 p.m. PT

Zimbabwe inflation soars to all-time high

By MICHAEL HARTNACK
ASSOCIATED PRESS WRITER

HARARE, Zimbabwe -- Yearly inflation soared to an all-time
high of 782 percent in Zimbabwe, the former breadbasket
of southern Africa whose economy collapsed from years
of drought and the government-backed seizure of thousands
of white-owned commercial farms.

Prices rose 27.5 percent during the month of February
alone, and the average family of five needed about
$90 just to meet basic food needs, far above average
earnings, state radio said Saturday.

Trade unions say those still formally employed -
about 20 percent of the work force - earn about
$55 a month. Workers on formerly white-owned
commercial farms, by contrast, earn as little
as $3 a month from their employers, many of them
beneficiaries of President Robert Mugabe's "fast
track" land redistribution.

The value of the Zimbabwean dollar has been in a
freefall since February 2000, when Mugabe ordered
the seizure of 5,000 white-owned farms.

In 2001, $1 was equal to 55 Zimbabwean dollars.
In 2003, $1 equaled 700 Zimbabwean dollars, and
in 2005 $1 equaled 15,000.

Today, $1 is equal to 99,000 Zimbabwean dollars.

The seizure of the farms for redistribution to black
Zimbabweans, combined with years of drought, have
crippled Zimbabwe's agriculture-based economy.

United Nations agencies say 25 percent of Zimbabwe's
12 million people are now dependent on international
food relief, even though the country was for years
a major food exporter to the region.

The nation is suffering its worst economic crisis
since independence from Britain in 1980 - when $1
equaled two Zimbabwean dollars - with acute shortages
of food, gasoline, medicines and other essential
imports.

The U.S. ambassador to Zimbabwe said in November
that gross government mismanagement and corruption
have reversed a half-century of progress in six years.

The Central Statistical Office said inflation was 782
percent for the 12 months that ended in February.
Moffat Nyoni, acting director of the government-run
Statistical Office, said prices of food and nonalcoholic
beverages rose 824 percent during that time.

State radio predicted that inflation would fall to 200
percent annually by the end of the year after a "bumper
harvest by new farmers," but an all-party parliamentary
committee warned before the November start of this
season's rains that production would be at an all-time
low due to shortages of diesel, seed, fertilizer,
chemicals, functioning farm machinery and skilled labor.

Farmworkers of Malawian, Zambian or Mozambican descent
have been forced to return to their parents' and
grandparents' countries of origin following eviction
by Mugabe's land recipients.

Mugabe conceded in December that shortcomings in his
land redistribution program contributed to critical
food shortages.

Poor planning, corruption, lawlessness, vandalism,
crumbling infrastructure and shortages of fertilizer
and seed have compounded the effects of recurring
drought, he said.