President Emmerson Mnangagwa has pressed the panic button over galloping prices of basic commodity as he accused retailers of plotting his defeat ahead of the August elections.
Retailers last week hiked prices as they chased the black market foreign currency exchange rate, which is now hovering between $3 500 and $4 000 to the United States dollar.
A tin of Red Seal baked beans was priced at $4 000 or US$1 in one local retail shop, while a 10kg bag of Red Seal Super Roller Meal was costing $27 999, sending shivers down many Zimbabweans’ spines as they recalled the dreaded 2008 hyperinflation, which drove goods off shop shelves.
NewsDay observed yesterday that some products such as cooking oil, sugar and rice were no longer available on most shop shelves as suppliers were allegedly withholding them in preference of the United States dollar.
Writing in his weekly column in a State-owned newspaper yesterday, Mnangagwa said government came up with several measures to stabilise the economy in “good faith”, but was being betrayed by the business sector.
“We even wonder if at all we are dealing with business anymore or with the politicians disguised as company executives seeking a political upset. Equally, politicians seeking to engineer market failures for definite political outcomes will be dealt with as political opponents and through rules of appropriate politics,” Mnangagwa said.
“We are even aware of certain businesses deliberately disabling point-of-sale gadgets to force the consumer to buy key goods in one currency, contrary to the laws of the land.
“Any business practices which suppress the use of any currency recognised by our laws are both illegal and do undermine this unique and most favourable position which is found nowhere else in the world.
“Maybe the time has now come for the government to insist that such tricks should be suspended until they can technically handle transactions in multi-currency. We will take all measures necessary to ensure there is stability, including painful ones should that ever become necessary.”
As fears mount over the possibility of basic products vanishing from shop shelves, Confederation of Zimbabwe Industries president Kurai Matsheza said industry was in talks with government.
“We are talking with the government and I cannot comment further than that,” he said.
Confederation of Zimbabwe Retailers president Denford Mutashu said Mnangagwa’s warning was warranted given the galloping prices across the economy.
“This will get business and government to constructively engage and pursue the common path of stabilising the economy,” Mutashu said.
But National Consumer Rights Association co-ordinator Effie Ncube said government should deal with the key drivers of inflation.
“Food inflation is making it impossible for many households to put food on the table. This will deepen poverty and hunger in a population where millions are already living below the poverty datum line,” Ncube said.
“Instead of addressing symptoms, government must address the key drivers of price hikes. Shortage of foreign currency has been pushing businesses to source it at a premium on the black market.”
Zimbabwe Diamond Mineral and Allied Workers Union secretary-general Justice Chinhema said workers’ earnings were now just figures.
“Our view is that government needs to accept that our current situation requires robust measures that protect the poor,” he said.
Government is, however, determined not to dump the local currency for the US dollar despite clear signs that the local currency is losing the battle against other currencies, especially the US dollar.
Crisis in Zimbabwe Coalition chairperson Peter Mutasa said those feeling the economic heat would express their discontent through the ballot.
“The currency problem and its concomitant effects will be an important factor in the upcoming elections. The majority of voters are feeling the heat. People have not been able to express their anger by way of protests. They will do so in the ballot box,” Mutasa said.
Zimbabwe Election Advocacy Trust director Ignatious Sadziwa said Zanu PF’s failure to address the current situation would disadvantage it.
However, political analyst Phillan Zamchiya believes that the current situation will mainly affect urban voters.
“Such an economic catastrophe will affect everyone differently. The paradox is that since 2000, more than 70% of what remains of the Zanu PF vote has come from constituencies that live on less than US$1,90 a day and hardly use the US dollar in exchange,” Zamchiya said.
“It is the economically emancipated mainly in urban areas who use the US dollar that have ditched Zanu PF. Even a survey in the rural areas would show you that it is the economically enlightened that have mostly voted for the opposition.”