Zimbabwe is collapsing

By CHIPO SITHOLE

HARARE, Zimbabwe — The value of the Zimbabwean dollar has fallen so low that it is no longer worth the paper it’s printed on.

While technically still the country’s legal tender, most residents use foreign currencies to pay for everything from groceries to hospital bills to mobile phone bills.

Despite a rate of inflation that last summer stood at 231 million percent, the government of President Robert Mugabe has steadfastly refused to acknowledge that his country’s currency has collapsed and has effectively been replaced by both the U.S. dollar and the South African rand.

In a desperate attempt to attract foreign currency into the country, however, the central bank last fall licensed at least 1,000 shops to sell their goods for foreign currency. The authorities also authorized mobile phone providers and public hospitals to accept foreign currency as payments.

Other non-licensed shops and service providers quickly followed suit.

Acknowledging that the American dollar has become his country’s currency would be a bitter pill for Mugabe to swallow.

“Such a declaration would be an embarrassment to a government which professes hatred of the U.S. government,” said Lance Mambondiani, a financial analyst in Harare.

Mugabe routinely accuses Washington and the British government of attempting to bring down his government through economic sanctions. The West, in turn, blames Mugabe for destroying his country’s once thriving economy.

Sizani Weza, a representative at the U.S. Embassy in Harare, maintains that Washington has not expressed an opinion on the use of U.S. dollars in Zimbabwe.

Rescue plan

A senior government official said Zimbabwe had reportedly approached South African finance minister Trevor Manuel and South African Reserve Bank governor Tito Mboweni with a proposal that they rescue the Zimbabwean economy by extending the common monetary area to include Zimbabwe. The rand is currently the official currency in South Africa, Namibia, Lesotho and Swaziland.

Under such a plan, the South African central bank would recapitalize Zimbabwe’s economy and stabilize the dollar.

In exchange for such financial assistance, however, South Africa is demanding that Mugabe commit to a genuine power-sharing arrangement with the opposition along with far-reaching political and economic reforms, according to this government official.

So far, it appears that Mugabe would prefer to preside over his country’s collapse than share power.

X Chipo Sithole is a reporter in Zimbabwe who writes for The Institute for War & Peace Reporting, a nonprofit organization in London that trains journalists in areas of conflict. Distributed by McClatchy-Tribune Information Services.