Zimbabwe's inflation will rocket to 1.5 million percent before the end of the year, the US ambassador to Harare predicted on Thursday, forecasting massive disruption and instability that will drive Zimbabwean President Robert Mugabe from office.
In a telephone interview, Christopher Dell said prices were going up twice a day, sapping popular confidence in a government which is now "committing regime change on itself."
"I believe inflation will hit 1.5 million percent by the end of 2007, if not before," Dell said. "I know that sounds stratospheric but, looking at the way things are going, I believe it is a modest forecast."
Zimbabwe's official inflation is 4,500 percent but independent economists and retailers say it is really above 11,000 percent and picking up speed. The black market rate for the Zimbabwean dollar has slumped, from Z$160,000 to the pound last week to more than Z$400,000. It collapsed further yesterday, tumbling to more than Z$300,000 to the US dollar. The official rate is fixed at just Z$250.
Mugabe insists the Zimbabwe currency must not be devalued.
"Prices are going up twice a day, in some cases doubling several times a week," said Dell, who is approaching the end of his posting to Zimbabwe. "It destabilizes everything. People have completely lost faith in the currency and that means they have lost faith in the government that issues it."
"By carrying out disastrous economic policies, the Mugabe government is committing regime change upon itself," he said. "Things have reached a critical point. I believe the excitement will come in a matter of months, if not weeks. The Mugabe government is reaching end game, it is running out of options."
Hyperinflation is spreading poverty, as even basic goods become unaffordable. Supermarket trollies lie idle as few can afford to buy more than a handful of goods. Government regulations only permit the withdrawals from banks of Z$1.5 million a day, which is not enough to buy a week's worth of groceries.
Golfers pay for their drinks before setting off on their round, because the price will have gone up by the time they have finished the 18th hole.
One Zimbabwean was recently told by a pension company that it would no longer send him statements as his fund was worth less than a postage stamp.
Many Zimbabweans are resorting to bartering.
"I traded some soap for two buckets of maize meal. It was far much better than trying to buy it in the shops," worker Richard Mukondo said. "People in the rural areas are even worse off. You can see they are hungry and their clothes are in tatters. They trade in whatever they can produce: tomatoes, onions, chickens and eggs."
Dell, who has had a tumultuous three years as ambassador to Zimbabwe, said that Mugabe faced further trouble from his army, which used to be considered solidly loyal to the president.
Last week six men, including an army private and a retired senior officer, were charged in court with plotting against the president. He said the allegations of the coup plot show divisions within Mugabe's ruling party, Zanu-PF.
"I don't believe it was a real coup plot. I think it shows one side of Zanu-PF plotting against the other. The bitter factional infighting is now dragging in the military. That cannot be good news for Mugabe," Dell said.
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