Mugabe: Zim dollar to be revived

Harare - President Robert Mugabe said Zimbabwe may revive the use of its own currency because the US dollar introduced to tame hyperinflation was unavailable to a majority of people in the countryside.

His comments contradict a pledge made to investors this week by economic planning minister Elton Mangoma to stick with the dollar, and raise questions about who is in charge of policy in Harare's fractious power-sharing administration.

Friday's state-run Herald newspaper quoted Mugabe as saying the government set up with rival Morgan Tsvangirai was battling to ease economic hardship, but Zimbabwe could not have a system where rural people were forced to trade their livestock.

"We cannot have a country like that. We are reviewing this so that we can go back to the use of our own national currency," he was quoted as telling a meeting of his ZANU-PF party.

In January, Harare lifted a ban on the use of foreign currency to stem hyperinflation of more than 230 million percent that had rendered the Zimbabwe dollar almost worthless.

The decision led to falling prices and a flood of goods onto previously barren supermarket shelves, but Mugabe said it had caused untold suffering because rural people had no access to the dollars and South African rands circulating in towns.

At the time of currency liberalisation, economists predicted it could make life tougher for ordinary Zimbabweans, most of whom would continue to be paid in local currency but be forced to pay for goods and services in foreign currency.

Mugabe's and Mangoma's contradictory comments suggest the unity administration formed in February to try end a devastating political and economic crisis was still at loggerheads over very basic policies.

"It creates the impression of a divided government which has not worked out some positions on very basic issues," leading economic consultant John Robertson said. "Potential donors will be worried about this."

At the same ZANU-PF meeting on Thursday, Mugabe attacked Western countries for refusing to lift sanctions because he was still in power, but said Zimbabwe would get aid from friends who would not impose conditions.

Mugabe and Tsvangirai, now Prime Minister, formed a unity government in February in a bid to end a decade of political hostility and an economic crisis.

For the past three weeks Tsvangirai has been on a tour of the United States and Europe to raise cash from donors. He has little money to show for it and has come under more pressure to persuade his partner to bolster democracy and human rights.

The Herald said Mugabe had dismissed charges by Amnesty International that he had failed to curb rights abuses and called the agency's secretary-general Irene Khan a "little woman who appeared to have been bewitched".

Mugabe also railed against what he says is a Western imperialist plot to destroy his ZANU-PF party.

"Only a dead imperialist is a good one," he said.

- Reuters