Panic over price hikes in Zimbabwe
Speculation on social media over a looming shortage of basic foodstuffs and fuel adds to feelings of despair
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.