Zimbabwe's President Robert Mugabe, campaigning for re-election this month, has promised salary increases to restive government workers, state media reported on Wednesday.

Mugabe, 84, faces the toughest challenge to his 28-year hold on power in the southern African country. Two rivals accuse him of dragging Zimbabwe into severe economic crisis through his policies and say they can restore growth.

Government employees have suffered badly from the world's highest inflation -- above 100,000 percent a year -- which has eroded incomes. Some teachers, the bulk of state workers, are on strike. Doctors have also threatened to walk out.

The state-controlled Herald newspaper said Mugabe, addressing a campaign rally on Tuesday ahead of the March 29 general election, had promised a huge increase for the government employees.

"Just yesterday, I was signing a new salary schedule of big salaries for teachers and civil servants," Mugabe said.

"I hope they will be happy, because we have worked out very good salaries."

He did not specify by how much the wages would be hiked, saying the "responsible ministers" would give details in subsequent announcements.

Analysts say that while the veteran ruler faces a splintered opposition, his government's failure to arrest the sharp economic decline poses a serious threat to his bid to retain power.

Both his opponents, former ally Simba Makoni and long time rival Morgan Tsvangirai, have made the economy a centrepiece of their presidential campaigns.

Mugabe has tried to woo mainly rural voters with farm equipment and subsidised loans. At the weekend, he also signed a bill giving locals the right to take majority control of foreign owned companies.

Mugabe, in power since independence from Britain in 1980, denies mismanaging the economy and says it has been sabotaged by Western states as punishment for his land reforms which including confiscating farms from white farmers.