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SADC prepares Zim rescue plan
08/07/2007 13:49 - (SA)
Johannesburg - The Southern African Development Community is preparing an economic rescue package for Zimbabwe which would include extending the rand monetary area into the impoverished country, reports said Sunday.
This is in an effort by the 14-nation regional bloc to stabilise the exchange rate of the Zimbabwe dollar and curb inflation, now estimated at a world record 5 000%, The Sunday Independent reported.
The SADC secretariat Tomaz Salamao was tasked at a summit in March to study ways and means through which the regional trading bloc could assist in the economic recovery of Zimbabwe.
It was at the same summit where South African President Thabo Mbeki was mandated to mediate between President Robert Mugabe's ruling Zanu-PF and the opposition.
According to the new plan, Zimbabwe would be included in the multilateral monetary area (MMA), which now includes neighbouring South Africa, Namibia, Lesotho, and Swaziland, making the rand a legal tender in Zimbabwe, the paper said quoting unidentified sources.
The neighbouring countries would also pump millions into the Zimbabwe reserve bank, effectively propping up the Zimbabwe dollar which has become almost worthless, and put its exchange rate with foreign currencies at the same level as the rand.
In the throes of an economic crisis
The paper said Salamao visited Zimbabwe on Thursday last week to discuss his plans with the government after briefing SADC leaders at the African Union summit in Ghana.
Mugabe would first have to agree to fundamental political reforms in the negotiations with the opposition Movement for Democratic Change due to start in Pretoria on Monday, if the plan is to go ahead, the paper added.
No immediate response from the government was available.
The new efforts come as Mugabe embarked on drastic forceful measures to try and control runaway inflation, warning that his government would seize and nationalise firms perceived to be profiteering excessively in a bid to incite Zimbabweans to revolt against the state.
Several price freezing violators were arrested over the weekend.
Zimbabwe is in the throes of an economic crisis characterised by four-digit inflation, shortages of basic foodstuffs like cooking oil and sugar, and massive unemployment.
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