South African Reserve Bank Governor Tito Mboweni expressed serious concern this week about Zimbabwean inflation, but stopped short of urging the Southern African Development Community to exclude the country from a proposed monetary union.
Mboweni noted that SADC zone inflation averages 9% - excluding the mathematical impact of Zimbabwe’s 6,600% rate. Including that figure, average inflation in SADC countries would be 332% – far above acceptable international norms.
The central banker said the SADC leadership must carefully consider who will be admitted to the union, saying membership must not be based on “brotherhood or sisterhood,” but on economic and financial requirements.
SADC economic and financial officials are aiming for single-digit inflation throughout the zone by 2008, setting the stage for a 2010 customs union. The launch of the monetary union, however, is not envisioned until 2016.
Zimbabwe's economic policies are also causing concern – especially the so-called indigenization law that awaits signature by President Robert Mugabe.
The controversial bill allows the state to take a 51% stake in any company that is not controlled by blacks. Mboweni was critical of the “indigenization” law, noting that economies in which property rights are respected tend to enjoy faster growth.
He told South Africa’s Business Day paper: “you can’t wake up one day and read in the (newspaper) that you own a farm you never bought…or you wake up to find your platinum mine is owned by indigenous people. It’s not the brightest thing to do.”
Economist and Chief Executive Officer Iraj Abedian of Pan-African Advisory Services in Johannesburg told reporter Blessing Zulu of VOA's Studio7 for Zimbabwe that it is imperative for Harare to stabilize its economy and attain regional targets.
Elsewhere, British Ambassador to Zimbabwe Andrew Pocock suggested Tuesday that inflation in Zimbabwe has most likely topped 10,000%, compared with the official rate of 6,593% for August as stated by the Central Statistical Office last month.
Pocock made the comment in a statement announcing a British donation of 8 million pounds for food assistance channeled through the World Food Program.
WFP Southern African spokesman Richard Lee told VOA that the agency has revised its figure for the amount needed to fund assistance to Zimbabwe downward to US$40 million through April of next year, from last month's US$97 million projection.
The change resulted from a combination of donations received - such as from Britain - and the amount of time required to register recipients and obtain authorizations from local officials to distribute food, which has foreshortened the distribution period.