Fury as prices go out of control

Published: 06 October 2019
DEBATE is raging regarding how much more long-suffering Zimbabweans can take of the double whammy of skyrocketing prices of basic goods and escalating shortages of essentials such as water, medicines, fuel and electricity — as the country's economic rot continues to worsen, the Daily News on Sunday reports.

This comes as an increasingly under-pressure President Emmerson Mnangagwa and his misfiring government have pleaded for more time to turn around the sickly economy.

It also comes as the Zesa Holdngs has significantly hiked its tariffs — on the back of debilitating power shortage which has shattered companies and left most homes in the dark for hours on end.

Mnangagwa, who marks two years in power next month since the military dramatically ousted the late former president Robert Mugabe in November 2017, has also since openly admitted that the economy is dead.

"I am aware of the pain being experienced by the poor and the marginalised. Fellow compatriots, getting the economy working again from being dead will require time, patience, unity of purpose and perseverance," he said on Tuesday while officially opening the second session of the 9th Parliament.

However, his critics say he is running out of time as ongoing weekly fuel price increases and Friday's shocking 583 percent electricity tariff hike by Zesa have made life even more miserable for both ordinary citizens and companies.

And there is no sign that the ongoing suffering will end anytime soon, as poverty levels in the country deepen.

To illustrate how things have completely gone haywire, business leaders and analysts who spoke to the Daily News On Sunday yesterday said the shock power tariff hikes would trigger a fresh round of price increases in the dying local economy.

A survey by our news crew in Harare also showed that most shops had increased their prices in response to last week's fuel price and power tariff hikes.

For example, a crate of eggs now costs $52, while a 2-litre bottle of Mazoe Orange Crush — which cost $32 last week — is now priced at $42.

A 10kg bag of roller meal now costs $50, while for two litres of cooking oil a shopper must part with $52, from last week's $43,80.

Other basic goods whose prices were increased significantly are 1-litre fresh milk, which has risen from $8,49 to $17, with most shops also reporting shortages.

Locally-made bath soaps are now retailing at between $9,99 and $18,10 — depending on the brand and size — up from  last week's price of between $4,35 and $8,99.

Tea leaves which cost between $10 and $16 last week are going for between $24 and $26 depending on the supermarket.

A bar of laundry soap which was going for $18,99 last week is now priced at between $24,50 and $25,59 — while a 2-kg bag of salt now costs between $10,99 and $19,99 — from $9,45 last week.

The Consumer Council of Zimbabwe (CCZ) said yesterday that the soaring prices of goods would have serious consequences on long-suffering consumers.

"We are concerned about how consumers and households can survive under such harsh economic conditions, also considering how much spending capacity they have.

"It is common knowledge that wages and salaries in Zimbabwe are not in sync with hyper-inflationary price increases and this has created opportunities for business to profiteer.

"The prices of goods and services have been galloping beyond the reach of many consumers. The many stakeholder workshops between government and business seem to not have yielded anything to lift the burden off the long-suffering consumers," the watchdog said.

"The CCZ Low Income Food Basket for the end of August was $971,45 and $1 510,27 for the end of September, showing an increase of 55,46%. The total basket in August 2019 was $1 546,94 and $2 286,52 for September, showing an increase of 48 percent.

"We call upon the social partners (government, business and labour) to meet as soon as possible to find ways to mitigate the situation," it added.

Industrialist and immediate past president of the  Confederation of Zimbabwe Industries, Sifelani Jabangwe, cited the electricity tariff hikes as another example of the factors that were behind the fresh round of price increases.

"The cost of power is a key enabler for business and key input for business ... But we must also focus on the root cause of all this, which is the depreciation of the currency, which then causes price increases," he said.

Economist Gift Mugano also said the government was failing to create a good environment for business and this was causing a lot of damage to both ordinary people and companies.

"Electricity is a cost driver and it affects the manufacturing side of business. I have gathered that electricity contributes about 20 to 25 percent to costs.

"The hike in tariffs simply means that businesses will incur operational costs, hence their decision to also hike basic commodities prices to match the production costs.

"As a country we need serious reforms to create a conducive business environment and to attract investors. But unfortunately we are doing the opposite," Mugano said.

"The country is also infested with high levels of corruption which is not being addressed, as well as many archaic statutory instruments.

"What the government should know is that we cannot use statutory instruments to run an economy. What we need as a country is political coherence and dialogue between President Mnangagwa and (MDC leader Nelson) Chamisa," Mugano further told the Daily News on Sunday.

Zimbabwe is currently going through its worst economic crisis in a decade, as the country battles acute shortages of foreign currency, fuel, electricity, medicines and water — which has triggered unrest among long-suffering citizens. 

- dailynews
Tags: prices,


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