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Last Updated: Tuesday, 24 July 2007, 12:06 GMT 13:06 UK
Mugabe vows to save sick economy
President Robert Mugabe
Robert Mugabe aims to give more ownership to indigenous people
Strict price controls will continue as Zimbabwe tries to turn around an ailing economy, President Robert Mugabe has said at the opening of parliament.

The country, once the bread-basket of the region, is suffering crippling food shortages and rampant inflation.

Mr Mugabe blamed droughts and sanctions for their economic woes and said they faced continued hostility from the UK and her Western allies.

A bill to nationalise foreign firms, including banks and mines, is planned.

The parliamentary session is the last ahead of elections due by March 2008.

President Mugabe said the government had been forced to intervene with price controls last month after an "astronomical" rise in the price of basic goods, and would remain committed to them to try and stabilise the economy.

Inflation is approaching 5,000% and shops in Zimbabwe are running out of the most basic commodities.

"Our economy continues to face challenges arising from the illegal sanctions imposed by our enemies," he told MPs.

All this had led to shortages of foreign currency, as well as erratic energy supplies, he said.

New measures

On Monday, the former head of the United Nations, Kofi Annan, spoke of a downward spiral of events in Zimbabwe, which he said was "intolerable and unsustainable".

ZIMBABWE CRISIS
Inflation: approaching 5,000%
Unemployment: 80%
4m need food aid
Life expectancy: 37 (men), 34 (women)

Economic refugees are arriving in neighbouring states like South Africa at a rate of around 3,000 a day.

Talks between the ruling Zanu-PF and the opposition MDC to find a political solution appear to have stalled, our reporter says.

The MDC wants a new constitution, but the only amendment on the parliamentary agenda could extend the president's term to 2010.

The constitutional bill will seek to combine parliamentary and presidential elections and a clause will also give MPs power to elect a new president if a vacancy occurs between elections.

The proposed empowerment bill stipulates that no company restructuring, merger or acquisition can be approved unless 51% of the firm goes to indigenous Zimbabweans.

It says "indigenous Zimbabwean" is anyone disadvantaged by unfair discrimination on race grounds before independence in 1980.

Tendai Biti, secretary general of the opposition Movement for Democratic Change (MDC), says that Zimbabweans have become wary about nationalisation.

"Zanu-PF took 11m hectares of land from members of the white community, but what did they do with it?

"They distributed it among themselves, so the land reform programme became a vehicle for personal aggrandisement. So everyone in Zimbabwe is sceptical," he told the BBC's Network Africa programme.

Some firms dually listed on the Zimbabwe Stock Exchange and London Securities Exchange include Old Mutual, NMB bank and Hwange.

Multi-national firms that may be affected by the new policy include Barclays Bank, Bindura Nickel Corporation and mining company Rio Zim.




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