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Reserve Bank Governor Gono Tackles Rising Inflation, Falling Confidence

Now that Reserve Bank of Zimbabwe Governor Gideon Gono has promised the International Monetary Fund to implement major changes in economic policy, many are watching to see if he can deliver on that pledge given political constraints.

Correspondent Netsai Mlilo of VOA’s Studio 7 for Zimbabwe spoke with some Harare residents who say Mr. Gono should channel funds to agriculture and manufacturing.

With inflation still rising, an economist says the continued fall in the dollar on the parallel market and continued movement in central bank auctions of the Zimbabwe dollar are major factors in the surge. Consumer inflation rose 10 percentage points in August to reach an annual rate of 265% as commodities prices tripled, led by food.

Studio 7 reporter Jonga Kandemiiri speaks with economist Eric Bloch, a member of the central bank’s board of advisors and a newspaper columnist.

Elsewhere, talk by some officials about the government taking over white businesses is adding to nervousness in Harare commercial and financial circles.

Transport Minister Chris Mushohwe was quoted as telling an audience in Nyanga that Harare could nationalize companies owned or operated by whites. However, Finance Minister Herbert Murerwa told the same conference organized by the Confederation of Zimbabwe Industries that constitutional amendments just signed into law by President Mugabe do not target business as such, only agriculture.

Legislation that would compel mining firms to sell a 30% stake to black Zimbabweans has languished for two years. Chamber of Mines Chief Executive Officer David Murangari said the holdup was “consultation among stakeholders.”

Business Professor Anthony Hawkins of the University of Zimbabwe tells Studio 7 reporter Patience Rusere that contradictory statements from government hurt investor confidence, adding that Harare lacks the capacity to undertake black economic empowerment like that which has transformed South African business.

More reports from VOA's Studio 7 for Zimbabwe...