Zimbabwe licences shops to trade with foreign currency

Reserve Bank of Zimbabwe Governor Gideon Gono told reporters the introduction of the "Foreign Exchange Licenced Warehouses and Shops Intiative" followed calls from business leaders.

The move to help businesses suffering from a chronic shortage of foreign currency to import spares and foreign goods, he said.

"We have watched and observed with heavy hearts the suffering of fellow Zimbabweans as they wait and continue to wait in long queues at the borders as they bring in basic commodities," Gono said.

"We have also seen desperate mothers, youth and the elderly spending cold nights in foreign lands as they seek for basic commodities."

To get a license, applicants must outline their foreign exchange needs, the goods they sell, capacity to handle foreign exchange, estimated weekly or monthly sale volumes and ownership structure, he said.

Gono said the intiative would run for "an initial period of 18 months to March 31, 2010."

The initiative comes against the backdrop of talks between the country's government and opposition on ending a major political crisis.

Zimbabwe's economy has virtually collapsed over the past decade with inflation out of control and chronic shortages of foreign currency and food including the staple cornmeal, sugar and cooking oil.

Authorities have tried measures including price controls to cushion shoppers against price increases but these have fuelled the black market where scarce goods are readily available at more than 30 times the official price.

The UN World Food Programme (WFP) estimates that 83 percent of Zimbabweans are living on less than two US dollars a day and that 45 percent of the population is malnourished.

Once hailed as a model economy, Zimbabwe's fortunes have nosedived since 2000 when veteran ruler Robert Mugabe seized white-owned farms and handed them over to landless blacks, often with no farming skills.

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