Zimbabwe’s new budget aims to salvage ruined economy

HARARE, Nov 29, 2006 (AFP) – Zimbabwe’s Finance Minister Herbert Murerwa walks the tightrope Thursday when he unveils the national budget of a food-hungry country groaning under record inflation and a ruined economy. Murerwa has the unenviable task of trying to stem 1,070.2 percent inflation and a free-falling currency in an economy which has shrunk by a third.

He also has to tackle ballooning unemployment and poverty.

“This time last year they (the government) said inflation would go down, but what we now see is that prices are on average ten times higher … if not 20 times,” economist John Robertson said.

“Murerwa should also prepare for a bad agricultural season given the shortages of inputs such as fertiliser and fuel. These shortages will have to be factored into the budget as subsidies,” Robertson said.

Zimbabwe, once a model economy in southern Africa and a regional breadbasket, has been in a tailspin for seven years after launching controversial land reforms which led to a huge slide in agricultural output.

The often forcible seizure of white-owned farms which were then doled out to landless blacks often without any skills, tools or experience has been fingered by critics as a major cause o