By Business Reporter- Bankers have warned of hyperinflation similar to the one experienced in 2008 following the devaluation of ZiG by the Reserve Bank of Zimbabwe last week.
They have also raised fears of the disappearance of basic goods from shop shelves as panic buying sweeps through the country, as people offload the collapsing local ZiG currency.
Goods that are at risk of vanishing from shops include sugar, cooking oil, mealie meal, and flour.
The ongoing collapse of the ZiG is also destabilizing the formal retail sector.
Recently, Food World, one of the nation’s largest supermarket chains, announced the closure of two major branches in Harare.
The Eastgate branch was shuttered following the closure of the Angwa/Jason Moyo outlet, sending shockwaves through the retail industry.
Other major supermarket chains, including OK Zimbabwe, Pick n Pay, SPAR, and Edgars, have warned of potential shutdowns as the ZiG currency crisis pushes them to the brink of catastrophe.
The Retailers Association of Zimbabwe (RAZ) has issued an urgent plea for government intervention to prevent the collapse of formal retail businesses, which collectively employ nearly 20,000 people.
“The government’s reliance on the overvalued official exchange rate is pushing businesses to the brink of extinction,” RAZ said in a statement, noting that regulated stores are struggling to compete with informal traders who use black market exchange rates.
In a letter to authorities, RAZ proposed two urgent measures to prevent further closures: allowing real-time exchange rates for pricing and providing targeted discounts to help stores remain competitive in U.S. dollar terms.
Without immediate action, the closure of major retailers could devastate Zimbabwe’s economy, wiping out thousands of jobs and depriving the government of critical tax revenue.
Retailers have also called for the Financial Intelligence Unit (FIU) to shift from a punitive approach to a collaborative one, sharing data to help inform economic policy and stabilize the retail sector.
As prices spiral out of control and more closures loom, the ZiG crisis threatens to plunge Zimbabwe’s retail industry into freefall.
In his State of the Nation Address (SONA) on Wednesday, President Emmerson Mnangagwa failed to offer practical solutions to the collapsing ZiG.
His speech, which lacked actionable policies, left many Zimbabweans questioning his leadership during the country’s severe economic distress.
Rather than addressing the critical issues of inflation, currency collapse, and widespread job losses, Mnangagwa deflected blame onto the private sector, accusing businesses of exploiting the foreign exchange market and participating in parallel market activities.
This failure to take responsibility or offer new strategies has only fueled public frustration.
At the center of Zimbabwe’s economic woes is the collapse of the ZiG currency, introduced in April 2024.
Mnangagwa’s defense of the currency during his speech did little to inspire confidence, especially as the Reserve Bank struggles to rein in inflation and stabilize the exchange rate.
While Mnangagwa touted the supposed benefits of the ZiG, businesses are suffering under its volatile value.
Retailers like Food World have already begun closing stores, and major chains like OK Zimbabwe, Pick n Pay, and SPAR have warned that they may soon follow.
Despite calls from the Retailers Association of Zimbabwe for real-time exchange rates and governmental support, Mnangagwa provided no concrete solutions to halt the sector’s downward spiral.
Zimbabwe’s inflation rate remains one of the highest in the world, eroding the purchasing power of ordinary citizens.
Yet, Mnangagwa’s speech lacked a significant plan to address this crisis.
Instead of unveiling a comprehensive economic recovery strategy, he pointed to agricultural growth and a potential bumper harvest—deflecting attention from the pressing issues of food prices, unemployment, and currency depreciation.
For millions of Zimbabweans, everyday essentials are becoming unaffordable, and the economic outlook remains bleak.
Mnangagwa’s vague assurances of future prosperity do little to ease the growing despair.
While he hailed a projected record wheat harvest and praised the Pfumvudza/Intwasa Presidential Climate-Proofed Agriculture Production Scheme, critics argue that these promises are disconnected from the realities most Zimbabweans face.
Even with advances in agriculture, the broader economy remains in freefall, and no amount of harvests will compensate for a failing currency and shrinking job market.
Mnangagwa’s focus on agriculture and mining investments failed to address the immediate financial struggles of urban dwellers, who are grappling with rising costs of living.
Moreover, his administration has made little progress in combating corruption, which remains a major obstacle to economic recovery.
Many see Mnangagwa’s inability to address Zimbabwe’s fundamental economic problems as a sign of his administration’s incompetence.
His reliance on deflections—such as blaming sanctions or parallel market activities—rather than acknowledging government mismanagement, demonstrates a lack of leadership in times of crisis.
As businesses close, prices rise, and ordinary citizens bear the brunt of inflation, it is clear that Zimbabwe needs more than empty rhetoric.
Without immediate and effective economic interventions, the country risks further descent into poverty and instability.
Mnangagwa’s SONA left Zimbabweans waiting for real leadership and solutions beyond mere words.
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