HARARE – Zimbabwean retailers, manufacturers and wholesalers have been told to cut the prices of basic goods in half in the latest bid to rein in runaway inflation, a cabinet minister announced yesterday.
“We have directed that retailers, manufacturers and wholesalers reduce the prices of goods by up to 50 per cent with immediate effect from last night,” Industry and International Trade Minister Obert Mpofu told AFP. “We took this decision after noticing the wayward behaviour by our industries which were behaving in an unscrupulous manner.”Government is aware that these price increases are a political ploy engineered by our detractors to effect an illegal regime change against the ruling party and the government following the failure of illegal economic sanctions.”Mpofu said goods and services whose prices should be reduced included bread, salt, transport, sugar and newspapers and that retailers should revert to prices they were charging on June 18.The new price of bread should now stand at Z$44 000 (US$180 at official rate, but 37 US cents at the parallel market rate) to Z$22 000.A packet of sugar will be reduced from Z$70 000 to Z$33 940.The price of fuel has also been slashed from Z$180 000 per litre to 60 000.”This directive is not a control, but we are just reducing prices of some of these goods so there will not be any shortages,” the minister said.Zimbabwe introduced price controls five years ago to fight a flourishing black market for staples such as cornmeal, cooking oil and bread.The economy is currently in freefall with Zimbabwe having to cope with the highest rate of inflation in the world.The release of the figure for May has been delayed but economists believe it is now nearly 5 000 per cent.Witness Chinyama, a Harare based economist described the latest move as “populist” adding that it would lead to shortages as loss-making manufacturers stop or scale down production.”Retailers will simply shift to an alternative market which in this case will be the parallel market,” he said.Zimbabwe’s economy has been on a downturn in the last eight years with shortages of basic commodities in the one-time breadbasket of southern Africa now commonplace.Nampa-AFP”We took this decision after noticing the wayward behaviour by our industries which were behaving in an unscrupulous manner.”Government is aware that these price increases are a political ploy engineered by our detractors to effect an illegal regime change against the ruling party and the government following the failure of illegal economic sanctions.”Mpofu said goods and services whose prices should be reduced included bread, salt, transport, sugar and newspapers and that retailers should revert to prices they were charging on June 18.The new price of bread should now stand at Z$44 000 (US$180 at official rate, but 37 US cents at the parallel market rate) to Z$22 000.A packet of sugar will be reduced from Z$70 000 to Z$33 940.The price of fuel has also been slashed from Z$180 000 per litre to 60 000.”This directive is not a control, but we are just reducing prices of some of these goods so there will not be any shortages,” the minister said.Zimbabwe introduced price controls five years ago to fight a flourishing black market for staples such as cornmeal, cooking oil and bread.The economy is currently in freefall with Zimbabwe having to cope with the highest rate of inflation in the world.The release of the figure for May has been delayed but economists believe it is now nearly 5 000 per cent.Witness Chinyama, a Harare based economist described the latest move as “populist” adding that it would lead to shortages as loss-making manufacturers stop or scale down production.”Retailers will simply shift to an alternative market which in this case will be the parallel market,” he said.Zimbabwe’s economy has been on a downturn in the last eight years with shortages of basic commodities in the one-time breadbasket of southern Africa now commonplace.Nampa-AFP
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