Shocking hike in prices of goods

 Shocking hike in prices of goods
Published: 21 September 2019 (172 Views)
THE disastrous plunge in the value of the recently re-introduced Zimbabwe dollar has resulted in prices of basic goods in the country shooting up at an even faster pace - prompting many hard-pressed Zimbabweans to describe the current state of the national economy as "a total disaster", the Daily News reports.

The startling plummeting of the local currency comes hardly three months after the government ill-advisedly banned the general local use of the stability-inducing US dollar and other currencies in the country, to pave the way for the wobbly Zimbabwe dollar — without adequate preparations to shore it.

The rout of the local currency also comes on the back of ongoing hikes in the prices of both petrol and diesel, which also continue to be in short supply nationally.

At the same time, well-known American economist Steve Hanke — who follows developments in the global economy closely — said yesterday that Zimbabwe's annual inflation was now at a staggering 918 percent, which tallies with the country's economic rot and runaway prices of goods.

Local experts who spoke to the Daily News yesterday said standard of living in the country had plummeted to levels last seen in the horrific era of 2008, when hyperinflation decimated both businesses and the lives of millions of ordinary people.

Meanwhile, a survey by a crew from the newspaper showed that the prices of most basic consumer goods had been increased three times this week alone — following the recent fuel price hikes and Thursday's crash of the Zimbabwe dollar.

For example, the price of a 10kg bag of maize-meal has increased from $21,30 to $53 — while a crate of eggs, which initially moved from $26,95 to $37,56 now retails at $43.

A kilogramme of economy beef which used to cost $31,90 has gone up to $37, while a 2kg packet of chicken now retails at $56 in most supermarkets.

Other commodities such as cooking oil ($37), milk ($10), rice ($27) and sugar ($20) have also had their prices revised upwards significantly, with manufacturers citing the ever rising cost of production for the increases.

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

"The cost of basic commodities has skyrocketed to unimaginable heights. The food basket has quadrupled over the past 10 months alone.

"Consumers are facing an assault from the triple threats of poverty, unemployment and the high cost of living that has not been witnessed in recent memory.

"They therefore find themselves not only poor and looking for jobs, but unable to buy even the most basic commodities and services.

"If you look at the poverty graph, Zimbabweans are actually far poorer today than when they went to fight for independence," Effie Ncube, an advocacy and campaigns officer at the National Consumer Rights Association, said.

Labour unions also warned that the worsening economic situation would destabilise workers as their salaries had been rendered useless by the rising inflation and price spirals.

Cecilia Alexander, the chairperson for the Apex Council which represents all public sector workers, told the Daily News that workers now needed a minimum of $5 000 to survive in the current environment.

"Prices are increasing on a daily basis and our position as civil servants is that we need an urgent meeting with our employers. The Tripartite Negotiating Forum (TNF) must meet and discuss the way forward for our country.

"The government gave us a provisional increment of 76 percent, and to tell you the truth, that money has been eroded by the current inflation.

"So, there is need to go back to the negotiating table and discuss matters affecting civil servants," Alexander said.
On its part, the Zimbabwe Congress of Trade Unions (ZCTU) said the economic situation had now reached crisis levels, which could trigger unrest in the country.

"We have witnessed the erosion of wages and salaries that has never been seen in our lifetime. The skyrocketing cost of living and costs of goods and services have impoverished most workers," ZCTU secretary-general, Japhet Moyo, said.

Business leaders also blamed the government for failing to improve the economy beyond its "high sounding" austerity policies.

"The issues of both parallel and interbank market exchange rates, fuel, power and operational costs affect the cost of products.
"Retailers are also faced with another challenge of mobile money transactions, as the retailer is being charged a huge percentage.

"The costs will obviously be pushed to the ordinary people, whose income levels are already depleted — and the most hit are people in rural areas.

"I spoke to manufacturers and they said they are operating at 30 percent capacity and this reflects on the supply. If the supply declines and there is high demand, prices will go up," Denford Mutashu, the Confederation of Zimbabwe Retailers, said.

Tough-talking former Finance minister in the short-lived 2009 unity government, Tendai Biti, said the government was "clueless to rescue the dying economy".

"Like I have said before, this economy is going nowhere because this government is incompetent and totally clueless. They say Mthuli Ncube (Finance minister) is using textbook economics, but I say he is not even opening any book.

"This government cannot live within its means. They keep overspending while hiding expenditure on measures to collect more revenue, that is the VAT and the two percent tax.

"The US dollar was a sun-block and when they removed it everything leading to hyper-inflation is now coming directly to them.

"Lastly, the issue of corruption is key as they steal money as if they are on steroids. Every day in Parliament, in the public accounts committee (Pac), we are shocked by the levels of corruption. We thought we had seen it all," Biti said.

Zimbabwe is currently in the grip of a mega economic crisis which has raised tensions in the country, resulting in labour, as well as pro-democracy and opposition groups clashing with authorities over the worsening economy.

- dailynews

Tags: Prices,

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