Innocent Sibonginkosi Ncube
Despite the government’s efforts to control prices, a fresh wave of price hikes has hit Zimbabwe, depleting consumers’ disposable income.
The surge of basic prices is attributed to the plummeting value of the local currency, the Zimbabwe Gold (ZiG), which has lost 44% of its value on the parallel market. The physical ZiG is still scarce as many people claim nit to have seen let alone used it since its introduction in April.
Retailers are flouting the official bank rate, citing manipulation by the Reserve Bank of Zimbabwe (RBZ).
“The interbank exchange rate does not reflect the true value of the ZiG on the ground,” said a retailer.
Prices of basic commodities have increased, with a 2kg bag of Mahatma rice now selling at ZiG48.10, up from ZiG44 a fortnight ago. Flour prices have also risen to ZiG38 from ZiG34.50.
An executive at a Bulawayo-based retail chain supermarket said,
“We have little choice but to raise prices to remain in business. The disparity between the official rate and parallel market is close to 50%.”
A manager at N.Richards, attributed the price increases to forex shortages.
“Manufacturers are supplying goods at a premium to source forex on the alternative market, leading to markups by retailers.”
Economist Dr. Prosper Chitambara explained,
“Companies are sourcing foreign currency from the underground market, where premiums are punitive, due to shortages on the official market. This mismatch between forex demand and supply on the formal market is causing the depreciation of the ZiG.”
The government has warned retailers and manufacturers using the unofficial exchange rate, but prices continue to rise.
Despite the warning, the war against illegal price hikes will not be won as the government concentrates on registered businesses leaving the informal sector which is the driving force against the depreciation of the ZiG.
Many unemployed Zimbabweans have invaded the streets to sell anything from groceries to clothes to vegetables to electrical goods and many more.
Some conduct their businesses at the back of their car boot, some on pavements, some at the side road. The whole country has become a huge supermarket.
Registered retail stores and supermarkets are finding the going tough as the informal sector sell right infront of their doorsteps.
“We have no choice but to play the same game as the informal traders… You see its hard for us because we are being monitored by government, but there is nothing we can do, we will close of we follow the law to the later.” Said the manager of the chain supermarkets.
On the streets the informal traders were amazed that the government is forcing price controls as well as trading in the local currency.
“I can and will trade on the ZiG if its available, but then its nowhere to be found. Its only in plastic money, physically, the authorities are lying. The ZiG is nowhere to be found.
“Still after trading in ZiG I have to have US dollars to replenish my goods. I order most of my stuff from South Africa. So how will the authorities force me to sell at a loss. This government is full of absurdities.”
These are the sentiments of Nhamo Musoni who runs a hardware shop along Herbert Chitepo Street with his wife running the boot sale of groceries.
This war is far from over.
Zim GBC News©2024