A FIGHT looms between government and business over a new
wave of price hikes, which President Emmerson Mnangagwa, in his Independence
Day speech yesterday described as unethical, unpatriotic and inhumane.
Mnangagwa warned business that the price hikes will be
dealt with as his government seeks to forcibly restore the purchasing power of
workers’ salaries eroded by rampaging inflation.
“Government is alarmed by the recent wanton and
indiscriminate increases of prices which have brought about untold suffering to
the people. This conduct by stakeholders in business, industry and commerce is
inhumane, unethical, unpatriotic and goes against the grain of economic
dialogue which the Second Republic has espoused. Government remains determined
to restore the purchasing power of all workers,” Mnangagwa said.
Government recently floated the real time gross settlement
dollars (ZWL$) rated against the United States dollars, removing an artificial
1:1 exchange ratio to allow free trade of the currency on the formal market.
The local currency has been taking a beating both on the
interbank market where it closed the week on US$1:ZWL$3,2 and the black market
at 1:5. This has pushed prices of basic commodities through the roof, eroding
disposable incomes.
Mnangagwa’s government has threatened to introduce
“people’s shops”– common in struggling communist countries – small-scale
bakeries and whipping systems to bring the prices in tandem with the poor
salaries workers are forced to take home.
“Wheat supplies are set to improve, while the establishment
of small-scale bakeries will be facilitated to enhance more affordable bread
prices. Thesetting up of Silo Foods Company will further see increased
availability and affordability of many basic commodities throughout the
country,” he said.
Former President Robert Mugabe tried to whip businesses
into reducing prices at the height of inflation, but failed to win the battle
as shop shelves ran empty and basic commodities were traded on the black
market.
Zimbabwe, already facing an economic meltdown is suffering
acute fuel shortages and could face a new wave of price increases as the ZWL$
continues to lose value, making the current fuel prices unsustainable.
Mnangagwa said his government had an alternative plan to circumvent the
challenges.
“In the fuel sector, we are adopting long-term strategies
to stabilise both the availability and pricing of the product.
“The introduction of a market-based exchange rate system is
expected to stabilise the economy, in the long run,” he said.
Facing a serious food shortage owing to a drought,
Mnangagwa assured the nation that strategic food reserves will be deployed to
ensure that all Zimbabweans are fed and will not go hungry.
“As a result of this year’s drought, considerable
quantities of grain in our strategic grain reserves will be availed so that
no-one dies from hunger,” he said.
The speech delivered under heavy rains which pounded
Harare, covered all sectors of the troubled economy, politics, sport and
business.
Soldiers, police, prison guards and airforce personnel who
mounted the independence guard of honour endured almost two hours of heavy rain
and left the field soaked to the kilt. Newsday
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