President Mugabe has shored up his election campaign with a handover of millions of pounds of imported vehicles, machinery and cattle paid for with money seized from private companies and local and international aid agencies, business sources say.

On Saturday Mr Mugabe, 84, presided over the distribution of 500 tractors, 20 combine harvesters and an array of modern farm equipment as well as 50,000 ox-drawn ploughs, 60,000 ox carts, tools, cattle, buses, motorcycles, generators and diesel.

The goods were to be distributed around the farming districts, he said, under the agricultural mechanisation programme, which would produce “the sound of machinery tilling the land in places far and wide and announcing with an irreversible finality that our land has returned to us”.

In two similar handouts last year —- of £12.5 million of equipment —- the main recipients of the modern machinery were members of the ruling elite in Zimbabwe. Human rights organisations said that peasant farmers were forced to chant party slogans to qualify for the manual implements.

No indication was given of the value of the handout on Saturday. John Robertson, an economist, said: “They must have paid cash [in hard currency] because no one anywhere will give the Government credit. It's a desperate attempt at vote buying.”

Mr Mugabe, after 28 years in power, is standing for another term in elections on March 29. He is challenged by Simba Makoni, his former finance minister and Morgan Tsvangirai, the pro-democracy leader. Mr Makoni hopes to capitalise on the despair within the ruling Zanu (PF) party.

With the agricultural and mining industries in ruins, the coffers drained by excess and its international credit ratings exhausted, there is one source of finance left —- the foreign currency bank accounts of private companies.

The money is routed into commercial banks via the central bank, which is under the control of Mr Mugabe.

“Every company that has tried in the last two months to draw on its export earnings has been told by their bank that the Reserve Bank of Zimbabwe [the central bank] says it can't be done at the moment because they don't have the money,” Mr Robertson said.

Bankers said that central bank agents have been buying foreign currency from black market dealers in the past month to pay for the re-election costs of Mr Mugabe.

At the time of the latest acquisition the Government has been struggling to pay for imports of grain and electricity and to supply drugs for hospitals.

A Cabinet minister complained last month that the equipment handed out last year was being used as transport and parked outside beer halls “instead of tilling the land”.

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