Harare/Johannesburg  - President Robert Mugabe launched new "cheap food hampers" Wednesday while maintaining a total ban on famine relief by aid agencies in a year in which the country is expected to undergo its worst famine since independence in 1980.

State radio said the "basic commodities accessibility programme" would sell hampers of basic goods like maize meal, cooking oil, flour and soap "to all households around the country at affordable prices."

It quoted Mugabe as saying at the launch that the hampers would "bring relief to the people" who were suffering from "the effect of illegal sanctions imposed by Western countries."

Earlier, central bank governor Gideon Gono said that the programme would "show manufacturers that goods can be produced and sold to people at affordable prices and still make a profit."

State media reports gave no indication as to where the goods came from or how the programme was financed.

The hamper plan follows the introduction shortly before the universally-condemned June 27 run-off presidential election, of "people's shops" - state-owned stores where goods were sold at low prices.

Huge queues formed outside the stores, where people bought as much as they could and then sold them on the streets outside at inflated black market prices.

Economists say that Zimbabwe's economy is heading for a crash, as inflation soars to new heights. Gono said Wednesday inflation was now at 2.2 million per cent, although analysts estimate it at ten times that - and the Zimbabwe dollar is plunging to new lows.

A single US dollar bill was trading Wednesday at 70 billion Zimbabwe dollars, down (from the Zimbabwe perspective), from 45 billion late last week.

Mugabe, 84, blames "illegal Western sanctions" for the country's hardships, although critics point out that he, his family and cronies are the only ones targeted by sanctions banning them from travelling to most Western countries and from holding assets there.

Despite the state offer of cheap food, hundreds of NGOs remain banned by the regime from distributing food to the millions of Zimbabweans thought to require relief aid.

Mugabe ordered the NGOs to suspend their field work after accusing them of using food to persuade people to vote for the opposition Movement for Democratic Change in March elections.

The MDC won the parliamentary elections and MDC leader Morgan Tsvangirai topped the poll in the presidential vote but withdrew from the June run-off against Mugabe over a spate of militia attacks on his supporters. The two parties have been holding what the MDC calls "talks about talks" on a powersharing government, as called for by the African Union, since last week.

According to the United Nations Food and Agricultural Organisation, the last summer harvest yielded only 575,000 tonnes of maize, the national staple, against demand of about 1.8 million tonnes.

According to the UN, 29 per cent of the population is "chronically malnourished."

"Mugabe is fiddling while Rome burns," an aid agency official, speaking on condition of anonymity, said about the food hampers.

"They have nowhere near the finance nor the goods to begin to meet demand. Everything will end up on the black market and the fat-cats will benefit." (dpa)