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Mugabe cracks down on wage increases

Robert Mugabe - Wrangling with hyper-inflation
Robert Mugabe - Wrangling with hyper-inflation

Zimbabwean President Robert Mugabe has imposed a new law on businesses banning them from raising wages to keep pace with the world's highest inflation.

The move is the latest in a government crackdown aimed at taming prices that have soared given inflation running at more than 7,000%.

Companies that violate the law will be fined or their employees jailed for up to six months.

Analysts say the new law could backfire, much like the government-imposed June price freeze, and deepen Zimbabwe's crippling economic crisis.

Mr Mugabe invoked the special Presidential Powers Act to give his government the right to approve all salary and price rises.

Zimbabwe's main Congress of Trade Unions denounced the move as ‘satanic’ and warned it would mobilise its members to resist the regulations.