Zimbabwe: Shops Empty After Government Extends Price Controls to All Products

source: allAfrica
SW Radio Africa (London)

28 June 2007
Posted to the web 28 June 2007

Tererai Karimakwenda

The government’s Herald newspaper reports that all goods and services whose prices were not previously being controlled or monitored will now be subject to price controls. The chairman of the Cabinet Task Force on Price Monitoring and Stabilisation, Obert Mpofu, said government had extended the controls because of what he called the “continued exploitation of consumers by some unscrupulous businesspeople who had devised methods to evade price controls.” Mpofu said all goods and services that were previously neither controlled nor monitored shall with immediate effect be monitored. He warned that those who do not comply shall face the full wrath of the law.

Businesses cannot keep up with the hyperinflation that is driving up costs and forcing them to increase prices daily. Economic experts have said simply ordering them to reduce prices does not solve the problem. They would be operating at great loss if they complied.

In the capital businesses immediately reacted to the news. Our Harare correspondent Simon Muchemwa said shop owners began emptying their shelves on Wednesday night in order to minimise losses. Describing the atmosphere as chaotic, Muchemwa said he saw truckloads full of groceries and other household products making their way out of town. Crates of Mazoe orange crush and packets of mealie-meal were seen being loaded onto trucks. Muchemwa said the Mazoe bottles that were selling for Z$600,000 were supposed to be reduced to Z$140,000 according to the government directive. Items such as soap, salt and cooking oil, which were already controlled, have been very difficult to find.

Police spokesperson Chief Superintendent Oliver Mandipaka warned businesses that the police would arrest them without fear or favour if they engaged in illegal pricing activities. And police crackdown teams have been deployed countrywide to enforce the new regulations. Muchemwa said the mood in Harare is tense and described the standoff between government and businesses as war.

Muchemwa visited the traditional supermarkets such as OK, TM and Bon Marche around Harare and in the high-density areas. He said none of them were making bread. They had been ordered to sell each loaf for Z$22,000 when it costs them almost that amount to produce it. Our correspondent witnessed vendors who stand outside shops buying bread from bakers like Lobels at Z$40,000 per loaf. They in turn sold each loaf for a minimum Z$50,000.

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