|The ZIMBABWE Situation||Our
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- may peace, truth and justice prevail.
|Zimbabwe sees additional budget for food imports|
Fri May 20, 2005 2:34 PM GMT+02:00
By MacDonald Dzirutwe
HARARE (Reuters) - Zimbabwe's is planning to table a supplementary budget to fund food imports because of a severe drought which has seen the central bank cutting this year's growth targets, a government minister said on Friday.
Acting Finance Minister Patrick Chinamasa said the additional budget would be tabled soon, but gave no date.
Zimbabwe needs to import 1.2 million tonnes of grain over the next 12 months at a cost of $250 million, but had only budgeted 100 billion Zimbabwe dollars.
"There will be a review and rationalising of expenditures. There will be prioritisation of expenditures with a view that drought mitigating measures will be implemented," Chinamasa said in response to a question during a post-monetary policy review.
Zimbabwe is in the throes of its worst economic crisis since independence from Britain in 1980, blamed on mismanagement by President Robert Mugabe's government. Mugabe denies the charges and accuses his domestic and international opponents of sabotaging the once prosperous country.
Central bank Governor Gideon Gono in his monetary policy statement on Thursday revised downwards growth forecasts for 2005 to 2-2.5 percent from 3-5 percent previously, citing the drought.
The country has a serious shortage of foreign currency, which has forced the government to divert resources for food imports. The central bank devalued the local currency by 31 percent to 9,000 to the U.S. dollar on Thursday, far short of the black market rate of 18,000/dollar.
Analysts said Zimbabwe , which has been without donor funding since 1999, should move fast to mend strained relations with the international community, adding that exporters had failed to generate enough foreign currency for the country.
"We need foreign capital to free local resources. The turbulence in the NGO (non governmental organisation) sector is not helpful for mending relations with external donors," Luxon Zembe, Zimbabwe National Chamber of Commerce president said.
Last year Mugabe said Zimbabwe had sufficient food to feed the country but later admitted the country faced food shortages, during campaigns for the March 31 parliamentary elections polls which were won by his ZANU-PF party.
The food shortages magnify Zimbabwe's long political and economic crisis which analysts say has been compounded by Mugabe's controversial seizures of white owned farms for blacks which disrupted the country's key agriculture sector.
Mugabe says drought, not land seizures, are to blame for food shortages but insists people will not starve.
The president's key finance aide has called for some of the farmers whose properties were confiscated in a land seizure programme to be allowed to resume growing crops to boost the country's flagging agricultural output.
Gideon Gono, governor of the central bank and Mr Mugabe's main policy maker, made the proposal as he announced a 31% devaluation of the Zimbabwe currency.
He added that the skilled whites and other new investors would be given special guarantees of uninterrupted tenure of five to 10 years, backed by government force to prevent any disruptions on the farms.
Mr Gono was careful to say that it would not reverse Mr Mugabe's redistribution of white-owned land to blacks.
However, observers say his plan would be an implicit admission that the land seizure policy has failed.
A Zimbabwean economist, John Robertson, said: "This shows the desperation of the government to improve the economy. They say it is not a reversal of their land seizures, but it is. It won't get very far.
"I don't think many farmers will take up the offer because they would have to give up their title deeds and lease their land back.
"The range of measures proposed by Gono and the government show that the economic situation is dire. But they are avoiding the fundamental changes needed because those would be opposed by Mugabe. These measures don't add up. The economy will continue to be a disaster area."
At the start of the land seizure policy in 2000, Zimbabwe had 4,500 white farmers, now about 400 remain on portions of their farms. Mozambique, Zambia and Nigeria have welcomed some of the skilled white farmers.
The economy has also shrunk by more than 40% in five years.
Yesterday Mr Mugabe did not comment on Mr Gono's proposal.
During the election campaign in March, the president said he was disappointed that only 44% of the land seized from whites was being cultivated and that the remainder was lying fallow.
He has also had to admit that Zimbabwe, once called "the breadbasket of Africa", needs to import food to feed its population. For months he had boasted that the country had a bumper harvest and would "choke" if it was forced to take international food aid.
But Mr Mugabe said this week that his government would welcome food from the UN, as long as it came without any political conditions.
The government announced yesterday that it was busy redrawing its 2005 budget to fund food imports.
Drastic cuts to other parts of the budget will be needed to raise the money to import food, the acting finance minister, Patrick Chinamasa, said, according to Reuters.
On Thursday the government devalued its currency and banned imports of luxury goods to try to reduce the economic freefall. But the devaluation falls far short of the Z$25,000 that one US dollar (55p) fetches on Zimbabwe's thriving black market.
Mr Gono reduced by half his forecasts of the country's economic growth, to 2.5%. That figure is viewed as unrealistic by economists, who point out the five consecutive years of economic decline.
John Worsley-Worswick of Justice for Agriculture said: "This is a puppet show and it's not going to solve things. Gono is a master of spin and he is saying that he can fix things. But the reality is that the few farmers who have managed to stay on their land are being hammered by the military.
"This suggestion that white farmers could come back is an admission of their failure, but I don't know anyone who would take them up on their offer. The government's agriculture policy has failed abysmally. There is no maize, there is no wheat, people are hungry. It's a debacle."
· Eighty percent of black South Africans who responded to a survey believe Mr Mugabe is ruling badly.
Food production in Zimbabwe has fallen by more than 50 percent
JOHANNESBURG, 20 May 2005 (IRIN) - Analysts have welcomed the
Zimbabwean government's announcement of loan facilities totalling over US $700
million for the agricultural sector, aimed at ensuring greater food security,
but are questioning the sourcing of the funds.
"Zimbabwe has no money - we have no production," commented Dennis Nikisi, economics professor at the University of Zimbabwe.
Reserve Bank governor Gideon Gono announced an Agricultural Sector Productivity Enhancement Facility (ASPEF) of more than $500 million in his quarterly review of monetary policy on Thursday. Under the ASPEF, farmers will be able to access loans at 20 percent interest.
The governor also announced a facility of over $200 million to improve agricultural infrastructure. The official The Herald newspaper quoted Gono as saying that the success of agrarian reform strongly depended on the country's ability to revive its agricultural infrastructure.
"While we can appreciate the governor's concern, and attempts to capacitate the farmers ... where will we get that kind of money from?" asked Nikisi.
The Zimbabwe Farmers' Union (ZFU) said that if the funds were available, the initiative was very welcome.
"Many new farmers are trying to cope with farms where most of the infrastructure, like irrigation pipes and water pumps, were vandalised when the old owners left - we desperately need to improve our irrigation system," said Tafireyi Chamboro, ZFU's chief economist.
Gono reportedly announced that almost half the $200 million earmarked for agricultural infrastructure would be used to purchase irrigation equipment and replace water pipes.
With this intervention, government intends to plant maize on 300,000 hectares, devote 150,000 hectares to winter wheat and 100,000 hectares to other cash crops, such as tobacco, potatoes and paprika, said local reports.
Zimbabwe's agricultural sector was thrown into disarray by the controversial fast-track land redistribution programme that began in 2000, when white commercial farmers were removed from their farms to make way for black settlers, who received little government assistance.
The chaotic land reform programme accelerated Zimbabwe's economic decline, critics have noted.
According to UN agencies, when measured against a five-year average, food production in Zimbabwe has fallen by more than 50 percent, due partly to the effects of drought. The situation has been compounded by the marked reduction of the large-scale farming sector, which produced only about one-tenth of its 1990s output.
There has, however, been suggestions from government that former commercial farmers with skills, particularly in the dairy, horticulture and tobacco sector, would be asked to return to the land.
Bumper crop of hunger
Zimbabwe's dictator has graciously condescended to accept international food aid for his starving people - but, as Robert Mugabe cautioned a U.N. envoy, only if the food arrives with no political conditions.
The United Nations might suggest free elections, an unmuzzled press, even an end to the beating and imprisonment of political opponents, but it would probably settle for an honest distribution of the food.
It is unlikely to get even that.
Mugabe has a history of using food to reward his supporters and letting the rest of the citizens fend for themselves. In the run-up to the March parliamentary elections, Mugabe insisted that the country didn't need food because it was about to reap a bumper crop of corn.
There was no bumper crop, and because of Mugabe's horribly ill-advised confiscation of the nation's large and productive commercial farms, not much else either. In a once-prosperous, food-exporting nation, people waited in long lines for bread, flour and gasoline.
With the elections safely over, Mugabe's government has admitted that if it doesn't quickly receive 1.2 million tons of maize, almost half of its 11.6 million people will be in imminent danger of starvation.
The United Nations can't do it - too many lives are at stake - but it would be very satisfying for the international organization to tell Mugabe that for the food to come he must go.