President Mugabe said the government had been forced to intervene with price controls last month after an "astronomical" rise in the price of basic goods, and would remain committed to them to try and stabilise the economy.
Inflation is approaching 5,000% and shops in Zimbabwe are running out of the most basic commodities.
"Our economy continues to face challenges arising from the illegal sanctions imposed by our enemies," he told MPs.
All this had led to shortages of foreign currency, as well as erratic energy supplies, he said.
Mugabe's political cannonballs are well shot. Because of western dependence on sanctions as a means of diplomacy Mugabe has been given a political beating stick to which he can mightily hammer against the rest of the world.
In reality the bad situation in Zimbabwe is partly Mugabe's fault, and partly the west's.
The west's embargo has no doubt led to shortages of supply of basic goods inside the country rising prices and inflation. Mugabe's land reforms on the other hand have done much worse. It has destroyed the right to property in the country shaking confidence in people's basic right to own and live on their own property. The wealthiest land owners have fled the country taking their knowledge, experience, and strength with them.
And now Mugabe comes along with price controls. If there weren't already shortages in Zimbabwe they'll be ones now that's for sure. Instead of dealing with the fact that their isn't just enough "stuff" for everyone, they want to set fixed prices. Bully for them. Now instead of prices controlling demand nothing will.
The proposed empowerment bill stipulates that no company restructuring, merger or acquisition can be approved unless 51% of the firm goes to indigenous Zimbabweans.
It says "indigenous Zimbabwean" is anyone disadvantaged by unfair discrimination on race grounds before independence in 1980.
Tendai Biti, secretary general of the opposition Movement for Democratic Change (MDC), says that Zimbabweans have become wary about nationalisation.
"Zanu-PF took 11m hectares of land from members of the white community, but what did they do with it?
"They distributed it among themselves, so the land reform programme became a vehicle for personal aggrandisement. So everyone in Zimbabwe is sceptical," he told the BBC's Network Africa programme.
And as with all state interventions into the economy promising large benefits to all - it really means large benefits to the ruling powers friends and relatives.
It's time for the rest of the world to admit it: sanctions don't work. They didn't work in Iraq, they won't work in Iran and surely not the Zimbabwe.