Zimbabwe begins selling fuel in hard currency

Report
from ZimOnline
Published on 03 Aug 2005
HARARE - Zimbabwe on Tuesday began selling fuel to motorists in foreign currency as it desperately tries to raise hard cash to import oil and end an acute fuel shortage threatening to bring the crisis-hit country to a complete halt.

A spokeswoman for the government's oil utility, National Oil Company of Zimbabwe (NOCZIM), said a garage in Harare's Arcadia suburb, Comoil Service Station, had been authorised to charge United States dollars for fuel, adding more garages across the country would be permitted to do the same in due course.

"The price is US$1 per litre and fuel is readily available," the NOCZIM spokeswoman, Zvikomborero Sibanda, told ZimOnline. "Motorists intending to access this fuel can buy coupons from the Reserve Bank of Zimbabwe (RBZ) foreign currency collection centre which has been established at the service station."

Other currencies Zimbabwean drivers can use to purchase fuel include the South African rand, Botswana pula, Japanese yen, British pound, and Swiss franc, according to Sibanda.

RBZ governor Gideon Gono announced during his mid-term monetary policy review statement last month that the government would allow garages to charge hard cash for diesel and petrol, both in critical short supply in the country.

But Gono had said the last ditch measure to help the RBZ raise hard cash from the public to pay for oil imports would only begin next month.

Gono could not be reached on Tuesday to establish why the central bank had now brought forward the plan to make motorists pay for fuel in foreign currency.

Zimbabwe is grappling its worst ever fuel crisis, itself the result of acute foreign currency shortages that began when the International Monetary Fund (IMF) withdrew balance-of-payments support in 1999 after disagreeing with Harare over fiscal policy and other governance issues.

President Robert Mugabe's chaotic and often violent seizure of productive farmland from whites only helped worsen foreign currency shortages as the mainstay agricultural sector and particularly the tobacco sector, which is the biggest single export earner, were disrupted.

Zimbabwe, once a regional breadbasket, has since 2000 when Mugabe began his land seizure programme survived on food hand outs from international agencies after farm production fell by about 60 percent. Four million people or a quarter of the country's population require food aid this year.

Apart from fuel, electricity, essential medical drugs, machine spare parts for industry, other key commodities are also in critical short supply in Zimbabwe because there is no hard cash to pay foreign suppliers.

Harare has approached China, South Africa and a few other countries still with friendly ties with Mugabe's isolated government seeking to raise US$1 billion to buy fuel and food.

Pretoria is said to have demanded wide-ranging economic and political reforms before releasing cash to Harare while Beijing promised to help but has not given the billion dollars in hard cash that Zimbabwe requires to avert total collapse.