Cash shortages: Basic food prices soar

HARARE - Zimbabwe is facing massive food shortages reminiscent of the 2008 hyper-inflationary era, as the country battles a worsening cash crisis that analysts blame on President Robert Mugabe and Zanu PF’s poor economic policies.

A survey conducted by the Daily News yesterday also showed that the prices of many basic foodstuffs have recently risen by at least 20 percent, while supermarkets have begun imposing a limit on the quantity of basic goods that individuals can buy.

For example, a two-litre bottle of cooking oil, which was going for an average of $2,99 on Friday last week, is now retailing for up to $3,60 — while foreign cooking oil brands have vanished from the country’s supermarket shelves altogether.

United Refineries chief executive Busisa Moyo told the Daily News yesterday that cooking oil shortages that are being experienced in the country were due to delays in payments to raw material suppliers.

“We are very concerned about the issue because payments are not being prioritised and payments are not going through fast enough despite the fact that we are in the top 10 of the central bank’s Import Priority list,” he said.

Moyo also noted that cooking oil producers were anticipating a 30 percent slump from the current 8 000 to 10 000 metric tonnes being produced, due to cash shortages.

Oil Expressers Association of Zimbabwe (OEAZ) president Sylvester Mangani echoed Moyo’s sentiments at a ministry of Industry meeting last Friday, saying the situation — if it continued unabated — would lead to a serious shortage of the commodity.

This comes as producers are failing to secure key raw materials from foreign suppliers, as the country’s banks have low nostro account balances.

A nostro account is a bank account held in a foreign country by a domestic bank, mainly to facilitate settlement of exchange and trade transactions.

In this light, when pressers make orders, their respective banks have to pay the suppliers through the nostro account.

Disgruntled citizens interviewed by the Daily News yesterday said they were now resorting to hoarding most basic commodities in preparation for the looming food shortages.

“We have heard rumours that there is going to be major price increases on most basic commodities, as well as shortages because of low or no imports.

“As such, we are buying things like maize-meal, flour, cooking oil, rice and sugar among others, ahead of the expected price increases,” said a shopper who only identified himself as Mapfumo.

The latest development comes after the prices of other basic goods such as maize-meal and salt have also been increasing steadily.

Zimbabwe, which is battling an economic recession after failing to register significant growth since 2013 when Mugabe and Zanu PF romped to a hotly-disputed election victory, is in turmoil after the central bank introduced a raft of measures to deal with the cash shortages last month, including limiting daily cash withdrawals.

The May 4, 2016 measures that included a proposal to introduce bond notes have seen depositors embarking on panicky withdrawals, fearing a return of the discredited Zimbabwean dollar.

Economic experts say the recent appreciation of the greenback against regional currencies, as well as Zimbabwe’s widening trade deficit — $3 billion by end of December last year — have also contributed to the severe cash crisis.

Labour and Economic Development Research Institute of Zimbabwe economist Prosper Chitambara said yesterday the cash shortages were also affecting businesses that needed to transfer money to other countries to pay for goods and services.

“The major problem is mainly a lack of confidence that has affected deposits in the banking sector. We are also witnessing a mini banking crisis . . . manifesting itself through what we call a bank run,” he said.

Comments (16)

The time of profiteering and hoarding is upon us spiralling the situation to the abyss. I wonder what the excuse would be this time, the gullible lot want an excuse to continue praise singing. Everyone knows the emperor has no clothes but not zanoids. It takes a special kind of stupid to support such a party and leader.

Galore 123 - 1 June 2016

...a mini banking crisis...omg this is a banking crisis of such proportion 2008 will seem like a holiday. Quick solution: get rid of the bond notes before they start, then maybe people might start banking again. Introduce rand because the US$ is firming against major currencies and our economy cannot sustain that. Crisis of legitimacy of the executive is an albatros around the Zim economy...situation to get really worse before it gets better. Tighten those belts as the storm gathers pace.

Lee - 1 June 2016

Zimbabwe needs to urgently address corruption in all sectors of the economy, create a conducive environment for business, promote SMEs, Revamp the local manufacturing sector through favourable policies, attract foreign and local new investors, reduce unnecessary imports , increase exports, chase away all ghost workers in public sector, revamp agriculture, privatise loss making parastatals such as NRZ , ZUPCO, Air Zim, etc, do away with culture of violence and intimidation against those with divergent political views, ensure performance based contracts for ministers, join the international community ie both the East and West, protect human rights, love one another and acknowledge that Zimbabwe is a beautiful country that belongs to us all.

Viona Ngwena - 1 June 2016

Ndipopaunoona venjere dzechidofo vachiita toitoi kufarira ZANU namugabe.Vamwe vanhu vabvaruka pfungwa

matsotsi - 1 June 2016

Zimbabwe needs to urgently address corruption in all sectors of the economy, create a conducive environment for business, promote SMEs, Revamp the local manufacturing sector through favourable policies, attract foreign and local new investors, reduce unnecessary imports , increase exports, chase away all ghost workers in public sector, revamp agriculture, privatise loss making parastatals such as NRZ , ZUPCO, Air Zim, etc, do away with culture of violence and intimidation against those with divergent political views, ensure performance based contracts for ministers, join the international community ie both the East and West, protect human rights, love one another and acknowledge that Zimbabwe is a beautiful country that belongs to us all.

Viona Ngwena - 1 June 2016

@viona ngwena,the country can never prosper with your likes around,as a country we are promoting STEM so that the country can have its own inventions but alas we have idiots like yourself who lack even the originality when coming up with a psuedonym,u are a pathetic lazy upstairs copycat who seeks attention by clinging to the coattails of others

truth - 1 June 2016

That is how you lie to each other. This is not profiteering. Prices and exchange rates are true prophets of what is to come. Watch this space. The Zimbabwean dollar is back and there is no US$ anymore, then importing is daydreaming now. We are back to where we belong. People who walk on their heads and think with their feet. This is self destructive.

Zvichapera - 1 June 2016

What next petrol then the whole country will be on its knees. It's a shame

Slim Cat - 1 June 2016

Biti has repeated said that Chinamasa is now in the habit of harvesting RTGS balances at RBZ, that is why the system is no longer reliable. Hence the delay in settling payments to suppliers, leading to shortages. Sooner or later, the missing funds which were in USD will be replaced by John Bonds. Your USDs has already been shipped out of the country. Ask Chinamasa junior!

Doug Msthaka - 1 June 2016

Bravo@truth.this copydog is anoying.

viola gwena - 1 June 2016

We must support the new bond notes to enhance our national economy and do away with all these foreign currencies which have hijacked our independence in Zimbabwe

Jabulani Sithole - 1 June 2016

harger werken available here in our jihannesburg stores.pink and white,call+27813051764

mama - 2 June 2016

We wonder how this will impact us on business transactions. We hear that no offshore payments and imports will be barned. Do this government really have people at heart? The chased away farmers, put stupid regulation on companies in the name of indeginisation and now the idustry is dead. People tried to sort for import to be able to feed their families, they are now banning imports. The country debt of 3 billion is five time the unaccounted 15billion at Chiadzwa. Knowing the situation we were in, Chiadzwa would have taken us a long way but this corrupt government is something else. After the tenure of minister of Mines O Mpofu, he now owns Vic Falls, Bulawayo and a lot of properties. Can we really say we dont know where the 15bn has gone? We are grown up people vanhu vari kuda kutijairira ava. Now if they can get the US$ where will they get them takuda kunohodha

Webnet Mandara - 2 June 2016

@Jabulani SIthole The issue is not supporting the bond notes but the governement should address the actual problems in the economy. Liquidity challenges are symptoms of a failed economy. 98% of the basic commnodities are all being imported. They have killed the industry and farming. Where else do you use the bond except in Zimbabwe? Lets get out of the box guy and think forward. We have children who are growing and we need to set the right path for them. Bond notes are a nuisance and has brought panic and uncertainity

Webnet Mandara - 2 June 2016

I notice that Viona Ngwena has touched the raw nerves of Zanu PF apparatchiks viz viola gwena & truth. Viona talks about common sense & love and the haters are on her case!! Vampires from Dracula show their colours very clearly!! Desperately defending a govt that has failed in every sense of this word.

Sagitarr - 2 June 2016

For as long as the fundamentals are not addressed then we are in serious trouble especially considering the fact that we have had the same CEO for 35 years. Strange enough, amidst all these problems, he doesn't lack anything.Only to live in a plane is what he wants.

Tahir Iqbal - 2 June 2016

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