GOVERNMENT is facing renewed pressure on the economic
front, with the parallel foreign currency market once again running amok —
pushing the prices of basic consumer goods like bread beyond the reach of many
Zimbabweans.
This comes as many leading schools around the country have
also sharply hiked their fees, further piling on the stress on already
hard-pressed parents — especially those earning their salaries in RTGS dollars,
which have been seriously eroded by inflation which officially stands at a
staggering 66,8 percent.
Yesterday, the coveted United States dollar breezed past
the 5,20 mark to the RTGS$ on the back of what both business and political
analysts say is a result of policy inconsistencies by authorities — following
last week's surprising announcement by Finance minister Mthuli Ncube that the
country would have a new currency within a year.
"I predict that by the end of June this year, it (the
black market rate) will be 1:10 ... in other words people are becoming poorer
and poorer. "Bad economic mismanagement is theft on people's savings and
this has been created by Mthuli Ncube ... he lives in a reality-distorted
world," former Finance minister during the short-lived government of
national unity (GNU), Tendai Biti, told the Daily News yesterday.
"The reason why we are having high inflation is that
we are not producing, and because we are not producing, we are not earning
foreign currency in the form of export earnings. "So, we are eating that
which other countries are producing. Our import bill is high, and our imports
are paid in US dollars.
"So, the US dollar has become a commodity … we have
this disaster that it shoots up on the black market and when it shoots up the
prices of everything go up while the value of wages goes down," Biti
added.
He also warned that government could soon be forced to
increase the price of fuel again, to avoid even worse shortages.
"In the past 10 days, I have been in Matabeleland
South, North and Bulawayo and there is no fuel anywhere. "I am moving with
jerry cans in my car as if we are in 1930 southern Rhodesia ... all thanks to
Mthuli Ncube," Biti railed.
In February, the Reserve Bank of Zimbabwe (RBZ) introduced
the RTGS dollar when it unveiled its Monetary Policy Statement which sought to
breathe new life into the economy. However, the RTGS dollar — which opened
trading at 2,5 against the US dollar — has since lost its value sharply, with
the interbank market battling to attract money.
Following Ncube's announcement, the forex parallel markets
shot to nearly RTGS$5 to the greenback from 4,30 amid indications that the
situation would get worse. Worried business leaders told the Daily News
yesterday that things "were edging towards a concerning zone",
requiring the government to take remedial action without "further
delays".
Confederation of Zimbabwe Retailers (CZR) president,
Denford Mutashu, said consumers were now "under siege" because of
falling production levels and the rampant foreign currency black market.
"The wave of price increases is worrisome and happening
at a time that disposable incomes have been eroded.
"The foreign currency parallel market has been running
amok. Bread and maize-meal went up due to movement on new producer prices for
grain and wheat that pushed up input costs for millers and bakers.
"If one factors in the speculative nature of our
pricing, it only means the consumer is seriously exposed," the forthright
Mutashu warned.
On his part,
Confederation of Zimbabwe Industries (CZI) president, Sifelani Jabangwe, blamed
the foreign currency black market for driving the prices of basic goods beyond
the reach of many consumers. "The sellers are not releasing money at the
low price quoted on the official market. So, businesses are still unable to
access that.
"We have seen an influx of buyers, but the sellers are
not forthcoming. What we need is the interbank to operationalise.
"Companies are still struggling because hard currency
is not readily available, and so the production side is constrained," he
said.
Yesterday, bakers increased the price of bread from
RTGS$1,80 to RTGS$3,50 — citing the rising costs of production and the volatile
operating environment.
This came hardly a day after millers had increased the
price of maize-meal in response to last week's hike by the government of grain
producer prices. Now, some private schools are also announcing sharp hikes in
their fees, in response to the worsening economic situation in the country.
Among the private schools, which have advised parents of
new school fees are Arundel School in Harare and Petra College in Bulawayo.
Parents with children at Arundel, who are day scholars, will now be required to
pay RTGS6 600 or US$1 500 — whilst weekly borders will be paying RTGS$8 900 or
US$2 023.
Full borders on the other hand will have to stump up RTGS$10
800 or US$2 455.
At Petra College, the fees for ECD have escalated from
RTGS$991 to RTGS1 050. Grades 1 to 7 will now be paying RTGS$1 620 from RTGS$1
390 — with Cambridge levy now costing US$710.
Forms 1 to 6 fees have also gone up from RTGS$1 965 to
RTGS$2 400, and US$1 040 for Cambridge levy.
Meanwhile, political analysts have warned the government
that it was killing confidence through policy inconsistencies. "I think
what we are seeing is the collapse of the economy in a number of ways. First,
the foreign currency crisis has persisted, necessitating that industry has to
pay a premium at the black market in order to access foreign currency for
inputs that are needed for production.
"The second thing is that the economy is not growing …
we are not seeing new industries … so incomes for citizens have remained
stagnant. "Then thirdly, there is the speculative aspect in which prices
are pegged at the black market rate, and where people tend to take advantage of
the situation.
"Fourthly, there are inconsistencies in terms of
policy. We hear one thing on the currency from the RBZ. We hear another from
the minister of Finance Mthuli Ncube," political analyst Rashweat Mukundu
told the Daily News.
"There was the talk of the Transitional Stabilisation
Plan, but we are not sure where it is right now, especially with reports that
the government has gone back to its usual behaviour of overspending and
crowding out productive sectors.
"Essentially, we are in a stagnant situation where
prices are shooting up, incomes have remained stagnant, civil servants received
an average of $60 to $70 as an increment ... meaning at the end of the day, the
increment may come down to $30, which is going to be washed away by the
increases in consumer goods, transport and fuel costs.
"Zimbabwe is in a deep crisis and one can really
wonder if we will get to the end of the year under this situation,"
Mukundu added. Daily News
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