Government wont impose pre-election price cuts

Mugabe faces his toughest election battle since coming to power in 1980

Zimbabwe's government has told businesses it will not try to impose pre-election price cuts in the inflation-ravaged country, despite President Robert Mugabe's campaign threats to do so.

Mugabe, facing his toughest election battle since coming to power in 1980 because of economic crisis and ruling party defections, had told a campaign rally on Monday he would push for cuts in prices, the state-run Herald said. But a government team met business leaders today Tuesday and while raising concerns over soaring prices, said there would be no forced cuts, Zimbabwe's main business group said.

Prices of milk, bread and other key goods have been rising weekly, especially since a June 2007 government edict to cut prices led to panic buying, prompted storeowners to stop stocking shelves and worsened a food crisis in what was once one of Africa's top agricultural producers. Some companies have not recovered from the price crackdown, which was intended to arrest soaring inflation -- currently above 100 000% and the highest rate in the world.

Mugabe wants prices reversed
The Herald said Mugabe wanted prices reversed to February 12 levels when teachers and state workers were awarded pay rises. The business leaders told the government they would keep prices at March 18 levels. Mugabe says price increases are part of a plot to force voters to turn against his ruling ZANU-PF in the March 29 presidential, parliamentary and municipal elections.

Mugabe is being challenged by former ruling party finance minister Simba Makoni, running as an independent, and rival Morgan Tsvangirai, leader of the main faction of the opposition Movement for Democratic Change (MDC). All candidates are promising to end the severe economic crisis, marked by high unemployment and chronic shortages. - Reuters