Zimbabwe tightens price controls amid panic buying

HARARE – Zimbabwe has imposed tight profit margins for businesses, stepping up a price rollback programme that has led to empty store shelves, long petrol queues and renewed fears of a total economic collapse.

President Robert Mugabe ordered that prices for a wide range of foodstuffs and consumer items be slashed two weeks ago, accusing businesses of raising prices as part of an effort by Western opponents to overthrow his 27-year-old government. Yesterday state radio reported a government taskforce overseeing the anti-inflation price scheme had set the price mark-up from producers to wholesalers at five per cent and at 10 per cent for prices from wholesalers to retailers.Industry and Trade Minister Obert Mpofu, who chairs the taskforce, also has revoked permits of private slaughterhouses and transferred all the country’s meat processing business to the larger state-owned Cold Storage Company (CSC), it said.Mpofu moved against the abattoirs – which handle about 40 per cent of the southern African country’s meat business – because they had stopped meat supplies.”In view of this, the government has thus, with immediate effect, revoked the licences of all private abattoirs,” he was quoted as saying by state radio.The new measures came as the government increased police patrols to enforce the price controls, which analysts say may provide temporary relief to a long-suffering population but is bound to worsen Zimbabwe’s economy.Zimbabwe is struggling with chronic shortages of food and fuel and inflation of 4 500 per cent.Last month the government ordered businesses to roll back prices on bread, beef, mealie-meal, milk, oil, and salt, sugar and other basic commodities in an effort to stem inflation.The forced price cuts, however, have sparked a wave of panic buying around the country, leaving many urban shops empty of basic goods that were already in short supply as a result of the country’s eight-year recession.Long petrol queues have resurfaced in the capital Harare, and hordes of shoppers sometimes lay siege outside supermarkets in the hope of new deliveries of sugar, cooking oil and bread – the most desired products.A Reuters correspondent saw dozens of shoppers jostling outside a shop in the city centre after rumours that a bread delivery van was on its way.”I have to buy because I didn’t get any yesterday,” one man said.”And now when I have any money I am in the habit of buying anything that I think I need because there is no guarantee that these things will be available in the future,” he added.Zimbabwe’s central bank has increased the daily cash withdrawals that individuals and companies can make from Z$1,5 million to up to Z$20 million to help people cope with the rocketing inflation.Private economists say the actual figure is probably double the reported government rate of 4 500 per cent for May.Nampa-ReutersYesterday state radio reported a government taskforce overseeing the anti-inflation price scheme had set the price mark-up from producers to wholesalers at five per cent and at 10 per cent for prices from wholesalers to retailers.Industry and Trade Minister Obert Mpofu, who chairs the taskforce, also has revoked permits of private slaughterhouses and transferred all the country’s meat processing business to the larger state-owned Cold Storage Company (CSC), it said.Mpofu moved against the abattoirs – which handle about 40 per cent of the southern African country’s meat business – because they had stopped meat supplies.”In view of this, the government has thus, with immediate effect, revoked the licences of all private abattoirs,” he was quoted as saying by state radio.The new measures came as the government increased police patrols to enforce the price controls, which analysts say may provide temporary relief to a long-suffering population but is bound to worsen Zimbabwe’s economy.Zimbabwe is struggling with chronic shortages of food and fuel and inflation of 4 500 per cent.Last month the government ordered businesses to roll back prices on bread, beef, mealie-meal, milk, oil, and salt, sugar and other basic commodities in an effort to stem inflation.The forced price cuts, however, have sparked a wave of panic buying around the country, leaving many urban shops empty of basic goods that were already in short supply as a result of the country’s eight-year recession.Long petrol queues have resurfaced in the capital Harare, and hordes of shoppers sometimes lay siege outside supermarkets in the hope of new deliveries of sugar, cooking oil and bread – the most desired products.A Reuters correspondent saw dozens of shoppers jostling outside a shop in the city centre after rumours that a bread delivery van was on its way.”I have to buy because I didn’t get any yesterday,” one man said.”And now when I have any money I am in the habit of buying anything that I think I need because there is no guarantee that these things will be available in the future,” he added.Zimbabwe’s central bank has increased the daily cash withdrawals that individuals and companies can make from Z$1,5 million to up to Z$20 million to help people cope with the rocketing inflation.Private economists say the actual figure is probably double the reported government rate of 4 500 per cent for May.Nampa-Reuters