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Friday, 29 June, 2001, 14:09 GMT 15:09 UK
Zimbabwe warns of currency crisis
Queue for petrol in Zimbabwe
The economic crisis has caused fuel shortages
The Zimbabwean Finance Minister, Simba Makoni, has said that the country has practically run out of foreign currency reserves, pushing the country deeper into economic crisis.

Mr Makoni told business leaders in Harare that the balance of payments position was precarious, but said that another devaluation on its own would not solve the country's economic woes.

The debate should focus on how can we stimulate more activity to generate more foreign currency

Finance Minister Simba Makoni
Correspondents say that despite repeated calls for devaluation, the government has kept the Zimbabwe dollar at about 55 to the American dollar. The currency is trading at 150 to the dollar on the unofficial market.

Mr Makoni said that the government would work with industry to revive ailing sectors such as tourism, mining, agriculture and manufacturing.

"I believe it will take no less than 24 to 30 months," Mr Simba told the BBC.

The minister also announced measures to strengthen surveillance of operations that generate foreign currency, and the foreign exchange market.

No consistency

At a forum of Zimbabwe's top economists, bankers and captains of industry and commerce, Mr Makoni said he opposed devaluation because "previous devaluations have not yielded results".

Finance Minister Simba Makoni
Mr Makoni said greater effort was needed
The reason for the failure was because, the minister added: "we haven't been consistent, we haven't been regular, we haven't been persistent and we haven't supported it."

To revive tourism, which can earn as much as 11% of total export receipts, but has plunged to an all-time low due to political tension, Mr Makoni suggested scrapping visas, and attracting back airlines that have pulled out of the country.

He added that the government was striving to ensure "normality" in the country, and a return to the rule of law.

Mr Makoni also announced that holiday allowances for Zimbabweans would be slashed by half to US$2,500 per year.

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See also:

18 Jun 01 | Business
Zimbabwe on the verge of collapse
24 Nov 00 | Business
Tobacco boom in Zimbabwe
04 Oct 00 | Business
World Bank halts Zimbabwe loans
31 May 00 | Business
African economies 'in reverse'
02 Aug 00 | Business
Zimbabwe devalues currency
26 Apr 00 | Africa
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