Panic as prices soar

THE prices of basic commodities have risen sharply since elections held on July 30 to levels that are too high for a dollarised economy.

BY BLESSED MHLANGA

The bout of inflation is blamed on excessive government spending and a critical shortage of foreign currency to procure imports and to stabilise bond notes, which have since been devalued by up to 80% on the parallel market.

President Emmerson Mnangagwa, who is in China for the Forum on China-Africa Co-operation (Focac), is seeking a $2 billion bailout to ease the crisis of foreign currency liquidity and cash.

The shortage of bond notes also appears to have worsened on the formal market, despite new, crisp notes being found on the parallel one.

Yesterday, stakeholders blamed the crisis on Mnangagwa’s failure to address “legitimacy” issues and non-appointment of a Cabinet, thus leaving the country on auto-pilot.

Zanu PF legal secretary Munyaradzi Paul Mangwana admitted that the ruling party was equally worried over the trend, adding there were engagements behind the scenes to deal with the economic slump even in the absence of Cabinet.

“We obviously are not happy if the prices are going up, we are not happy at all … it doesn’t mean that when there is no Cabinet, there is no government. Permanent secretaries are there, ministries are there,” he said.

Mangwana said Mnangagwa could not appoint a Cabinet before Parliament was sworn-in, but could also not miss Focac, a platform for him to structure deals that have the potential to revive the ailing economy.

“The President appoints ministers from Members of Parliament and no single Member of Parliament has been sworn-in and they are all parliamentary-elect right now … Zimbabweans should be patient,” he said.

Mangwana said government would, upon his return this week, talk to industrialists to appreciate the cause of the price hikes in the past few months and then seek solutions to the massive problems.


“Obviously, government will act, but the first stance is persuasion, talk to industrialists and find out why prices are going up. We would like the process to be stable,” he said.

But MDC Alliance secretary-general Douglas Mwonzora said “darker days” were in the offing for Zimbabwe, following a disputed election, calling on Zanu PF to move quickly to address its legitimacy issues.

“We are headed for an economic catastrophe. The prices of basic commodities have shot up and there are massive job losses looming. It shows that Zanu PF is not the answer to the current economic quagmire we find ourselves in. It is important to redress certain fundamental issues, including the chronic issue of legitimacy and respect of the people’s will,” he said.

Mwonzora took potshots at Mnangagwa, accusing him of flying out of the country for Focac before appointing a Cabinet, thus leaving the country on “auto-pilot”.

“The country right now is clearly on auto-pilot with the President having gone AWOL. He has not attended to the appointment of Cabinet, leaving a policy gap, lack of confidence and free-for-all which is now manifesting in the failing of the bond note, price hikes and spinning economy which Zanu PF is clueless to contain,” he said.

Zimbabwe Congress of Trade Unions secretary-general Japhet Moyo warned this could trigger industrial action and unrest if urgent solutions were not found to stem the massive haemorrhage of workers’ earnings.

“This is reflective of the failure of the bond note and shortage of cash which has eroded disposable income for workers. They get their salaries from banks and these prices are eating into our salaries and the disposable income of the workers is being eroded over the years,” he said.

Moyo said there had been no communication between workers, government and employers owing to the collapse of the Tripartite Negotiating Forum, which last met two years ago.
“That missing link has seen us fail to get information on what is informing these price hikes, while salaries are stagnant, this could trigger job losses. There needs to be harmony between workers and employers, especially in times like these,” he said.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya, who is part of Mnangagwa’s delegation in China, however, insisted that the bond note had not failed.

He attributed the current shortages to what he described as “a mismatch between supply and demand of cash in the market hitting the economy”.

“It’s not about the bond notes, but about the disparity between the quantity of money in circulation and the demand of foreign exchange. As monetary authorities, we are putting in place foreign exchange facilities to the amount of $400 million to increase the supply of forex to meet demand,” he said.

Confederation of Zimbabwe Retailers Association president Denford Mutashu, however, said there was no need to panic as the price hikes were temporary and could be stemmed by a Cabinet announcement and monetary policy correction.

“The public should not panic about the temporary price increases being experienced on the market on selected products. Most manufacturers have cited shortage of foreign currency and the obtaining parallel market premiums. It will be folly to continue to think that the cash parallel market would subsist,” he said.

“However, it is also worrying that while RBZ has so far done so well to allocate the 30% of the forex they retain, 70% retained by banks remains a mystery. This could go a long way in dealing with these issues.”

Mutashu said the beef industry was being hit hard by a foot-and-mouth outbreak.

“Beef producers have attributed the increase of beef prices to foot-and-mouth disease in parts of Mashonaland Central, which limits movement of cattle as government moved to contain it. However, it is prudent that the President announces Cabinet urgently, and a competent one for that matter. The new Cabinet will certainly spur confidence,” he said.

Delta Beverages company secretary Alex Mahamure allayed fears that there could be an increase in prices of their products, saying although they had been hit hard by foreign currency shortages, they would not drop production levels.

“It’s a given that our operations are being affected by shortages of foreign currency. Everyone is being affected. There is little access to foreign currency … we operate in US$, you can’t have a spike of prices in that currency. That’s not how we work,” he said.

Confederation of Zimbabwe Industries president Sifelani Jabangwe said there was no need to press the panic button, saying the outlook was actually bright for industry, with capacity having improved from last year.

“Cement is more to do with supply side constrains, because manufacturers have had technical challenges which they are working on and, unfortunately, it happened more or less around the same time for Lafarge which had a technical problem with their silos and then PPC also had a specific problem, so they have not increased their prices, but it’s the speculators who are doing the usual,” he said.

Jabangwe said the prices of products in the food basket monitored by government and industry have remained stable and will not be spiking anyti
me soon.

“The other products, we sat down with the Consumer Council of Zimbabwe. The other products have remained more or same like in the basket of goods, they have remained within $8 of what they were in January. So those are the basics, those are the important goods. Remember, we have about 14 products monitored by government. The other ones may go up and down owing to currency issues on the black market,” he said.

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34 Comments

  1. The current price hikes are result of a number of factors,chief among them is the inability of the current government to understand how a national economy operates. The ZANU PF government has failed since 1980 failed to direct the skills base it inherited to drive the economy opting instead to appoint “paper tigers” who have consistently run down companies, state owned institutions and government departments. Ian Smith believed in his technocrats (not paper tigers)and used them to create wealth at the height of crippling sanctions. ZANU PF leadership believes that the skills required to turn around the economy of this country can only be found in China or former colonial masters countries. The ballooning YOUTH population if not properly structured to participate meaningfully in the economy and the myth about China, will be the source of ZANU PF’s downfall.

    1. well explained,gvt should support the youths and SMES are the pillars of any economic revival in zimbabwe.

  2. Look east is good but what is oiling industry and life going on is money from diaspora through mukuru etc. Nothing of that money is coming from china. Chinese harvest that pool of forex by their dollar for 2 products. Gvt is looking the wrong side.

  3. China is sucking Africa. China and Zanu are the same.

  4. welcome to the next five years…

    1. useless buttholes

      indeed, these useless aholes will just take zim down with them, they dont care, they rip it off enough each and every day

  5. Effects of rural vote

  6. Look East for what,Customary who is surpose to beg from someone the one wth two kids or the one with 20 kids. Zanu musanetse China a country with billions people also for an couple to have 1 kid think twice.Guys dayz are numbered you can rigg the election but for economy you breath fire zvino we are demanding what you promise us come soon you regreat

  7. Comment…Its seems we have forgotten we dont have a cabinet because of pastor advocate Nelson Chamisa’s concourt case and the economic challenges are the ripple effects. In 2000, in USA, Al Gore challenged the presidential elections’ results but accepted defeated as he felt the nation was greater than his personal ambitions. Chamisa must consider Zimbabwe first.

    1. are you really really serious attributing this to chamisa

    2. Why do you want a 40 year old to sort out your mess Legitimacy first he os too young to be a President can he can not be too young to resusitate the economy funnnny days to come you won then win the economy

  8. Barely after rigging the election prices are taking an upward trend, cement and drug shortages. pfeerorits you are so daft.

  9. I have went on to seek preview of the Economic Circle and how it operates only to be told that we import everything. Did they mean to include the following

    Cooking Oil,
    Instant porridge,
    cement,
    soya chunks,
    beef,
    counter-books

    Arrest all Retailers who still have the belief to become billionaires at the expense of the generality of Zimbabwe

    1. Kkkkkk Using which law

  10. China with her population of 1.2 billion plus needs resources to cater for her large population therefore do not expect an sound development from her. What she is after is loot resources from Africa to create jobs for their nationals. Look at most of their structures, it is just temporary. How can one have a movable offices, movable plants the list is endless. Yes we need them to a certain extend. The issue of us looking east is a bit trick because we might be looking west through the east and our resources will not add any value.

  11. 2008 dejavu handei tione…..!

  12. Chakuyinga Chakuyinga

    Comment…SANCTIONS! Maiweeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!!

  13. Ma CHINA auraya nyika period, they dont accept ecocash niether swipe ko mari yacho varikuiendesepiko..they dont have bank accounts in Zimbabwe pls maZimbo ngatimboitai operation maCHINA mhani taneta natwo tuvanhu utwu nxaaa

  14. The problem is the current government which is clue less on issues. You can rig the election but not the economy.

  15. we may be looking west through the east, thats point on man

  16. Kuwiriranakwakanakakugarakunzwanana Garanewakomurudohamandishe

    Comment…#Anonymous, vana vazhinji vachatadza kuenda kuzvikoro. Vanhu vazhinji vachafa nekutadza kuenda kuzvipatara. Zvirwere zvichawanda nekuti nyika ichatadza kutenga mishonga. Zvipfuyo zvichapera nekuti Hurumende ichatadza kutenga mishonga
    Vane mari vacharamba vachidzvinyirira avo vasina. Regayi zvive mumawoko aJehovah Samasimba, vachapa mhinduro yavo. Wenyama apana anozvigona. Nekudaro ZVIUYA ZVIRIMBERI.

  17. Farai Johnson Nhire

    Did Ed ever promise that he would solve economic problems over night? Even before the cabinet is sworn in here nhai mazimba? Makaitwa seiko nhai imi? To those who are suffering from chinafobia, be informed that china is the new king of the world. Were you aware that US owes China more than a trillion us dollars and are still borrowing some more? MaAmericans anotoendao kunokwata kuChina! Donald Trump akatotsvao zvake! Mirirai nguva imi musamhanye. Mudhara achauya. Mudhara wacho ishumba murambwi.

  18. YOU RIG AN ELECTION AND THESE ARE THE CONSEQUENCIES. THIS COUNTRY WILL NEVER EVER REALISE ITS POTENTIAL IN AS MUCH AS WE HAVE PEOPLE WHO LEAD IT AFTER STEALING AN ELECTION. WE WILL REMAIN POOR FOR EVER EVEN WITH THE ZANU PF NE PFEEEEEEEEE YAVO IYOYO. CHIIIIIIIIIIIIIIIIIIIIINJA IWE. MOITA ZVINGANI YOU STEAL AND DO NOT PERFORM MUNODA KUJAIRIRA MAZIMBA IMI MAVE KUZOTIKONIWA MANJE

    1. Spot on !

    2. Spot on !

  19. kid marongorongo

    im happy with what is going on in towns let the prices continue to go up because this much affects those who stay in towns, they are mostly MDC supporters. the MDC have cried for the imposition of sanctions that have impacted to our economy thank you Biti for killing your supporters with your invitations of evil sanctions muchamama. kusvika makuziva pekugumira mupolitics

    1. Maruza Tarusenga

      ZANU yakazara nemadofo. Havana kudzidza pana Mugabe kuti they cant rig the Economy. If they are intellectuals how can they repeat the same mistake over and over again.

  20. Zichururisinashwa

    This African custom of perpetually living in future tense needs STOP right now. STOP IT. Democracy, freedom of speech and fair play EVERYWHERE, RIGHT NOW PLIZ. FORTY YEAR OLD LOOK EAST HEAVEN, RIGHT NOW PLIZ. OTHERWISE ITS TIME FOR ULTIMATE “LOOK ME”.

  21. The only viable solution is to implement GNU again. Zanu(PF) on their on are clueless bafoons when it comes to mending the economy. I wont be surprised if we get dead wood agan for a cabinet. Remember The fear Mnangagwa has for people in his own party. He
    wont risk his life by abandoning his friends in crime. We are doomed to say the least

    Comrade Mujambajecha

  22. Zanu PF has rigged the elections before but only to find itself stuck when it failed to rig the economy too!

  23. We all know where it is going. Shortage of this and that.The next thing ,demonstrations. We have seen it before .It’s a strategy applied all over the world.

  24. @kid marongorongo wakatanga kuziva rini kuti Zim is under sanctions?

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