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Cash-strapped Mugabe leaves wheat at Beira
Business Day (SA)
September 03, 2007

http://www.businessday.co.za/articles/economy.aspx?ID=BD4A554543

HARARE — President Robert Mugabe's cash-strapped government in Zimbabwe cannot pay for 36000 ton s of wheat waiting at the nearest seaport, Beira in Mozambique, reports said yesterday.

Zimbabwean Security Minister Didymus Mutasa told the official Sunday Mail newspaper that a shortage of hard currency meant Harare could not make a one-off payment to the international supplier of the grain.

"As soon as we pay, a little amount is brought into the country. We are still feeding from hand to mouth, as this is usually a week's supply," he said.

Bread has been in short supply since the government imposed price controls on all goods and services at the end of June in a bid to quell inflation, now at more than 7600%. The price of bread was slashed to Z$22000 a loaf, from Z$45000.

But the strategy backfired, as commodities disappeared from shops only to reappear on the black market at much higher prices.

A recent official bread price hike to Z$30000 a loaf has not improved supply.

Commentators say hundreds of office workers in Harare are turning to ice cream as an unlikely lunchtime substitute.

There seems little prospect of relief, especially as Zimbabwe's wheat harvest due at the end of next month is expected to be the worst in seven years.

Zimbabwe's millers need 450000 ton s of wheat a year. Experts say power shortages disrupted irrigation of this year's crop, which is likely to be much below the 78000 ton s reaped last year.

Separately, the government has allowed hotels, restaurants and bars to increase prices by up to 50%, citing "viability" problems in the tourism and hospitality industry.
Sapa- DPA-AP

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