Harare, Zimbabwe — Zimbabwe's freight industry has been held in limbo by Mozambique's demands for rail charges to be paid in US dollars and not in Zimbabwe dollars as has been the practice in the past, official sources said.

Zimbabwe has an acute foreign currency shortage, and freight industry officials said it would be impossible for their companies to source US dollars to meet the new Mozambican demand.

Mozambique's state-run rail company, CFM, recently told its Zimbabwean customers it would no longer accept payment for services in Zimbabwe dollars but in the US greenbacks.

"We are still trying to negotiate as well as find out from CFM whether we can still pay locally in Zimbabwe dollars. It is difficult for us to obtain foreign currency, let alone pay it in Mozambique as demanded, especially in the wake of a critical shortage of the commodity experienced in the country," said a freight industry spokesman.

Mozambique's Indian Ocean ports are Zimbabwe's shortest routes to the sea for its external trade.