Panic over price hikes in Zim­babwe

Spec­u­la­tion on so­cial me­dia over a loom­ing short­age of ba­sic food­stuffs and fuel adds to feel­ings of de­spair

African Independent - - NEWS - MICHELLE CHIFAMBA

FIFTY-six-year-old Clara Shumba of Kuwadzana sub­urb in Harare sur­vives on small-scale trad­ing. In front of her gate, a metal ta­ble is stacked with small units of ba­sic com­modi­ties which range from su­gar, cook­ing oil, wash­ing pow­der and bath soap and an as­sort­ment of other snacks.

On a daily ba­sis, Shumba makes her way to the main shop­ping cen­tre in her residential area to buy gro­ceries for re­sale. For the past 18 months she has man­aged to sur­vive by main­tain­ing her small busi­ness.

On Satur­day, Shumba, like many Zim­bab­weans, woke up to a night­mare when she dis­cov­ered most prices from the re­tail shops that she nor­mally buys from had been in­flated.

“I could not be­lieve my ears when they said the prices of ba­sic goods had been in­flated, and that they were lim­it­ing the num­ber of units per item one could buy,” Shumba said.

“It was so dev­as­tat­ing be­cause I make small prof­its which range from 50c after you have sold the whole pack of salt, su­gar or wash­ing pow­der. It is sim­ply push­ing me out of busi­ness be­cause if I in­flate the prices, no one will buy,” she added.

Racked by uncer­tainty as the econ­omy con­tin­ues to crum­ble, op­er­at­ing in a cash­less econ­omy and slowly ad­just­ing to a three­tier pric­ing sys­tem – trans­act­ing through Eco cash (mo­bile money), cash in the form of bond notes and US dol­lar and bank trans­fers – Zim­bab­weans on Satur­day were sent on a panic that re­sulted in the fall of the bond note against the US dol­lar on the par­al­lel mar­ket.

“By close of busi­ness on Fri­day, the US dol­lar was $14 against the bond note. Which means for ev­ery 10 bond note if you want $10, you pay an ex­tra four dol­lars,” said a for­eign cur­rency trader in Harare named Gi­ant.

“As the bond note con­tin­ues to fall, it means more money for us be­cause many peo­ple in Zim­babwe sur­vive on small trad­ing. To im­port their goods for re­sale, they have to con­vert their money into US dol­lars and that’s how we make money,” Gi­ant added.

Fear­ing a re­peat of food short­ages that gripped the coun­try 10 years ago, and after read­ing mes­sages and images that had been cir­cu­lat­ing on so­cial me­dia, peo­ple car­ry­ing large quan­ti­ties of su­gar could be seen mov­ing across the cen­tral busi­ness district of Harare as spec­u­la­tion of the to­tal dis­ap­pear­ance of ba­sic food sup­plies gripped the city.

“A 2-litre bot­tle of cook­ing oil is now $5, up from $3. In most shops the cook­ing oil is no longer in stock, and we are afraid that by end of the year there will not be any­thing left,” said Martin Karikoga, while car­ry­ing 40 kilo­grams of su­gar on his shoul­der.

As a re­sult of the spec­u­la­tion on the dis­ap­pear­ance of ba­sic food, pri­vately-owned fast food out­lets in the cap­i­tal Harare were chang­ing prices on their menu, some dou­bling and oth­ers with an ex­tra 50c or a dol­lar.

“If we do not in­crease our prices, we will soon sell our­selves out of busi­ness. The fuel short­ages and the in­crease in the price of cook­ing oil af­fect our busi­ness so much that we will not able to sus­tain it,” said a man­ager of a small restau­rant in the cap­i­tal.

Swelling queues at fuel sta­tions could be seen across the city as mo­torists searched for fuel. The tem­po­rary short­age has im­pacted mainly on pub­lic trans­port, with fare prices in­creas­ing from 50c to a dol­lar dur­ing peak hours.

“I have spent more than two hours wait­ing and I don’t know if I will be able to ac­cess the fuel. I don’t know how long this sit­u­a­tion will last and we are wor­ried if it gets worse. I have to go to Masvingo and I don’t know if I’ll be able to make it. The gov­ern­ment must in­ter­vene,” said a mo­torist in Harare.

Ac­cord­ing to the Re­serve Bank of Zim­babwe (RBZ), bond notes are equiv­a­lent to the US dol­lar. They were in­tro­duced about 10 months ago to re­duce cash short­ages – yet an in­crease in for­eign cur­rency deal­ers on the par­al­lel mar­ket and the bal­loon­ing bank queues con­tinue to ex­ist.

RBZ gov­er­nor John Man­gudya is on record say­ing that the econ­omy of Zim­babwe is on the re­bound and was ex­pe­ri­enc­ing an in­crease in for­eign cur­rency al­lo­ca­tion for ba­sic com­modi­ties and fuel.

Soon after land­ing at Harare In­ter­na­tional Air­port upon his re­turn from the United Na­tions Gen­eral Assem­bly in New York, Pres­i­dent Robert Mu­gabe said the price hikes were be­ing used to cause panic among peo­ple so that they can riot against the gov­ern­ment.

“This is not an is­sue you should worry your­selves over. We will deal with it in just two days,” said Mu­gabe.

For­mer Zim­babwe Na­tional Stu­dents Union na­tional spokesper­son Zi­vai Mhetu said the gov­ern­ment and rul­ing Zanu-PF ben­e­fited from the prob­lems they had cre­ated.

“The rul­ing party’s mis­man­age­ment of the econ­omy has re­sulted in the un­prece­dented cri­sis in the coun­try.

“The eco­nomic cri­sis has been cre­ated by the Robert Mu­gabe gov­ern­ment and is af­fect­ing young peo­ple who con­sti­tute the largest per­cent­age of the coun­try’s pop­u­la­tion,” Mhetu said.

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