Price hikes: Writing was on the wall

THE latest round of price increases that have affected mainly basic food commodities was still going to take place, taking into account the uncertainty on the market.

Following the unfortunate announcement by Finance minister Mthuli Ncube that the country would have its own currency within 12 months, the money market responded immediately.

The parallel market rate for the US dollar, where the green back is found, shot from around RTGS$4 to over RTGS$5 per US dollar, pushing prices of goods and services up.

To make matters worse, Cabinet had last week approved the increase of producer prices for grains, ostensibly as incentives for farmers. 

Although government quickly said it would come with a subsidy to avert inevitable price increases, these adjustments in the producer prices of grains would trigger, it was almost certain prices of commodities like bread would inevitably go up. 

Today, most retailers are selling bread at around $3,30 and a 10kg pack of maize-meal is now worth over $14. Alternatives for bread like rice and flour have also gone up, leaving very little room for consumers to manoeuvre. 

This is happening at a time prices of other goods and services have also gone up while earnings have actually shrunk as a result of inflation.

A $100 worth of groceries three years ago is significantly different from what the same amount can buy today. This situation was made worse by the introduction of the bond note towards the end of 2016. 

Despite the resistance by several groups that included workers’ bodies, government went ahead and pushed the unpopular bond note into circulation.

Zimbabwe’s economy has been in a free-fall for decades now, something, which has worsened in the last two years since the end of the stability-inducing government of national unity (GNU) in 2013. 

Unprecedented shortages of fuel, medicinal drugs, industrial machinery as the foreign currency scarcity bites, have characterised the economy which is badly in need of revival.

When former president Robert Mugabe was deposed in November 2017 following a soft coup, Zimbabweans were excited, hoping the will for once witness change. Following President Emmerson Mnangagwa’s endorsement via the July 30 elections, things have got worse.

The issue of price increases needs urgent attention otherwise the Zimbabweans will be pauperised soon by such a toxic environment. This could only be possible if government and business sit down to map workable solutions for the nation.


 

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