UN report slams Zimbabwe, says worst economic crisis to deepen

Source: AFP

Agence France Presse via NewsEdge Corporation : ADDIS ABABA, July 16 (AFP) - The forcible occupation of white-owned farms in Zimbabwe has contributed to the deepest economic crisis in the country's history, one which is set to worsen, the UN warned Tuesday in a damning report.

"Zimbabwe is currently a crumbling economy facing a grave economic crisis," the United Nations Economic Commission for Africa (ECA) said in its annual overview of the economic health of states across the continent.

"The land issue is at the heart of Zimbabwe's national economic crisis," it said, adding that President Robert Mugabe's government showed a "tendency for inconsistency."

"Land redistribution should go hand in hand with good governance to protect output and jobs," it added.

"The economy has been contracting since 2000 and the outlook for 2002 shows an increasing incidence of food insecurity, poverty, inflation and worsening balance of payments," the report said.

Zimbabwe "is facing the worst crisis in its history," said Patrick Esea, the director of the ECA's Economic, Social and Political Division.

The report said that the occupation of white-owned farms, couple with poor weather conditions, had led to "the lowest agricultural performance in recent years."

In May, Zimbabwe's finance minister, Simba Makoni, announced that the country's overall economy shrank by 7.3 percent in 2002, while the agricultural sector, the historical pillar of the economy, suffered a decline of more than 12 percent.

The ECA report projected negative growth of five percent for 2002.

The ECA report noted that 75 percent of the country now lived in poverty.

It explained that a sharp decline in exports and inflation had undermined financial stability and prompted dramatic capital flight.