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Be Smart About South Africa

Flashbacks of Harare’s Economic Collapse

Zimbabwe raised salaries for government workers by 50 percent on Wednesday, hours after nurses stopped work at a major government hospital in the capital Harare, demanding to be paid in dollars because of soaring inflation. Workers fear the country is returning to the 2008 era when a bout of hyperinflation rendered salaries and savings worthless. The government brought back the Zimbabwe dollar last June. Finance Minister Mthuli Ncube said in a statement the salary rise would take immediate effect, adding that workers would also get a monthly allowance of $75. Inflation has risen to 785 percent. The price of bread and sugar increased by at least 30 percent this week alone. Central bank governor John Mangudya said in a statement that it would introduce an auction system from June 23 to improve transparency in foreign currency trading. The move is meant to remove the discredited fixed exchange rate that exporters say disadvantages them and makes the cost of business more expensive. Mangudya said individuals and companies would be allowed to make a single bid of up to a maximum of $500,000 per auction.

SOURCE: AL JAZEERA

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