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Tuesday, 4 September, 2001, 16:02 GMT 17:02 UK
Bankers slam Zimbabwe's economic policies
A man takes chickens to market
The poor take the brunt of Zimbabwe's recession
The head of Zimbabwe's second biggest private bank has criticised the economic policies of President Robert Mugabe.

Paddy Zhanda, chairman of National Merchant (NMB), told shareholders that hyperinflation, a lack of foreign currency, and a thriving black market are causing acute problems.

Mr Zhanda is a senior figure in Mr Mugabe's Zanu-PF party.

Julius Markoni, NMB managing director, told the BBC's World Business Report that Zimbabwe needs a better co-ordinated land reform programme and incentives for foreign investment and exporters.

"In order to reverse this trend there must be changes in the political field and economic measures", he said.

Zimbabwe's economic woes
Unemployment has soared to over 50%
Inflation is currently running at 70%
The economy is expected to shrink by 10% in 2001
Asked if he was worried about speaking out so openly against President Mugabe's financial policies, Mr Markoni said: "We're not having a go at the government as such. We're just stating day-to-day facts which affect how people can afford to live, or not to live, in Zimbabwe.

Closing down

Nearly 700 companies are reported to have closed down in Zimbabwe in the last 18 months due in part to chronic shortages of fuel and foreign exchange.

President Mugabe has said he will scrutinise the reasons behind the closures to determine if they were prompted by a desire to destroy the economy.

Critics of the regime have blamed the crisis on government mismanagement.

The president, however, has accused local whites and Western governments opposed to his land reform programme of sabotaging the country's financial well-being.

The president has faced widespread international criticism for his government's plans to seize white-owned land for resettlement by black farmers.

Western donor countries and lending agencies critical of land seizures have suspended foreign aid.

Local currency tumbles

Zimbabwe's vital export sectors have also suffered heavily since the local dollar devalued by almost a third and officially pegged at 55 to the US dollar.

On the black market, however, the local dollar trades at around 350 to the US dollar.

The prices of many key products have also been fixed, creating an illusion of success.

However, NMB's Julius Markoni said inflation is hurting the poor more than the middle classes.

With little else on which to spend their money, wealthy Zimbabwean have been buying shares, resulting in a surge in the stock market of some 120% this year.

Profits for NMB rose by 102% to nearly one billion Zimbabwe dollars in the last year.

Zimbabwe's neighbours are keeping a wary eye on events, fearing that the crisis could undermine economic growth across the whole region.

NMB managing director Julius Markoni
"Mugabe must change his policies to help Zimbabwe's economy"
See also:

24 Apr 01 | Africa
Zimbabwe farmers urge devaluation
19 Apr 00 | Business
Zimbabwe's economy under threat
16 Oct 00 | Africa
Zimbabwe price rises spark riots
18 Jun 01 | Business
Zimbabwe on the verge of collapse
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