John Simpson: The abject poverty in a country where everyone is a millionaire

In Robert Mugabe's Zimbabwe, everyone is a millionaire. You have to be: a loaf of bread costs a million Zimbabwe dollars, a newspaper costs two million, and a decent joint of beef costs a hundred million. The only problem is that the average wage is 20 million dollars a month. They're called Mugabe dollars and it isn't a term of affection.

Everyone queues here: in the supermarkets, at the petrol stations and in the banks, in order to draw out the money to buy anything. Inflation is so high that items which cost a mere20 million dollars yesterday are likely to cost double that by tomorrow. For some reason, the government refuses to print million-dollar notes; perhaps it thinks it would look bad. The highest note is for 750,000 dollars, and doing the maths is horrendous.

It's extraordinarily difficult to find anyone here who supports President Mugabe. He is loathed in the Harare slums. In Mbare, where two years ago his thugs bulldozed the shanties housing thousands of opposition supporters, small children shouted anti-Mugabe slogans as we drove past.

Shopkeepers, domestic workers, hospital staff, Aids patients, people selling handicrafts in the street – they all hate him. A very senior Zanu-PF figure, a man who sees himself as a king-maker, met me clandestinely in Harare. He hated Mugabe more than any of the others.

I am in Zimbabwe undercover, together with two colleagues. The BBC is banned, so it felt particularly good to broadcast live from here for last night's Ten O'Clock News. It's the first time any British television news organisation has broadcast from Zimbabwe since Mugabe refused to let foreign journalists come here.

The biggest problem is that BBC World, our international television news channel, has a big following here, especially among the political elite. There's a real danger of being recognised and arrested.

Back in London a make-up artist fitted me out with a beard, to make me look like an Afrikaans farmer. But it had a habit of coming loose in the heat and, if we were caught, it seemed unwise to wear a disguise. So I've just worn a baseball cap to cover my untidy white hair. I look pretty awful, but not as bad as I looked in the beard.

The disguise has worked pretty well. We have been in Harare for a week, and have spent a lot of time driving and walking round the city, the suburbs and the slums. Recording what is known in the trade as a "piece to camera", walking down a main street in Harare apparently talking to myself, was the tensest moment. I had to do it a couple of times, regardless of the onlookers and the police stooges.

So far I have been recognised three times. Once was in an expensive restaurant, where we were filming how the Mugabe elite live. Our own meal came to 290 million dollars; I left a 10 million dollar tip (about £2.50). Once was by a senior opposition figure whom I wanted to interview anyway, since he had recently been tortured by Mugabe's secret police. And once was in a shop where I wanted to find a pair of Zimbabwe's famous Courtenay boots.

Yet unpleasant though Mugabe's Zimbabwe is politically, it isn't Idi Amin's Uganda. There is still a certain degree of personal freedom here. People can be tortured for their political beliefs but it's rare for anyone to be killed. The murders of white farmers eight years ago have not been repeated.

But there are spies everywhere. One attached himself to the BBC's cameraman Nigel Bateson as he finished some clandestine filming in an empty supermarket. "I would so much like to be your friend," the stooge said. "Won't you give me your name and phone number?" "I couldn't do a thing like that," Nigel replied, "I hardly know you."

And because Mugabe is so unpopular, it has been easy for us to find people to shelter us and help us. For them, I suspect, it's a quiet act of resistance. The BBC has called me on three different occasions to warn me of rumours that we were in Harare. Each time the three of us discussed the possibility that we might be caught and sent to a Zimbabwean prison. Each time we agreed to stay on and finish the job.

That job is almost finished now. We have established that there is a major split within the ruling Zanu-PF party, and that a former finance minister, Simba Makoni, is being put forward by a powerful grouping as a candidate to challenge Mr Mugabe for the presidency.

The high-level Zanu-PF figure who briefed us in secret was certain that 2008 was likely to be the year Mugabe's hold on power was either weakened or ended.

But he won't be brought down by a popular revolution. A combination of a new and tougher approach by South Africa, the worsening economy, and a palace coup may do the job. But Mugabe is clever and resourceful. Even now, it is too soon to write his political obituary.

As for us, we will be crossing the Zimbabwean border about the time this article appears. After so many years of being banned, it's been a real pleasure, if slightly nerve-racking, to spend a week here again. This is a magnificent country. It just deserves to be governed better.

John Simpson's reports will be broadcast on the Ten O'Clock News this week