Government to nationalise failed businesses

Zimbabwean President Robert Mugabe on Monday threatened to nationalise businesses that closed because of strict price controls on basic commodities issued last week, agencies reported. Speaking at the funeral of liberation war veteran Clement Muchachi, Mugabe also lashed out at Britain, accusing the former colonial power of deliberately sabotaging his nation's economy through undeclared sanctions. "We will as the state take over any businesses that close. Businesses that deliberately close, we will take them over, they are ours anyway as the nation. We will reorganise them with the workers," Mugabe said.

Defending his government's decision to slap price controls on basic commodities, Mugabe said free trade had fallen victim to "the British government interfering with our own system of importation of goods, going to suppliers and whispering to them to impose sanctions on us." He accused Britain of intercepting ships carrying fuel destined for Zimbabwe and offering to buy it to prevent the shipment from arriving in the country. The price freeze on commodities - including bread, maize meal, sugar, cooking oil, beef, chicken and pork - was the first since the government abolished price controls in 1991 as part of western-backed economic reforms.

The government has pegged the price of a loaf at 48.40 Zimbabwe dollars, a drop of about 14 percent from last week's price. That price would be about 88 US cents at the official exchange rate, but less than 17 US cents at the unofficial rate used by most currency traders. A main bakery chain in Harare said the set prices did not take into account transport, power and other costs, and 200 of its workers were put on shorter working hours as production was cut. According to analysts, the price freeze was an attempt by Mugabe to stave off discontent over soaring prices ahead of next year's crucial presidential poll.