This represents a 109% hike on the $860 that was being
charged mid-last month for the same loaf.
In an interview with NewsDay yesterday, Consumer Council of
Zimbabwe executive director Rosemary Mpofu said the consumer watchdog had noted
with “great concern” increases in prices of basic commodities such as bread.
“Consumers are currently facing numerous challenges from
high consumer prices, low wages and incomes. With schools set to open soon they
will be further hard pressed in paying school fees, levies and buying uniforms
with some schools said to be demanding foreign currency payments only,” Mpofu said.
“We appeal to retailers, producers and monetary authorities
to dialogue and address issues driving prices high, among them being the
volatile foreign currency exchange rates, in order to contain run-away price
hikes causing untold suffering to consumers, meanwhile urging consumers to seek
other healthy alternative foodstuffs, home grown, in order to cushion
themselves against high prices.”
National Bakers Association of Zimbabwe president Luckymore
Zinyama said it had set the bread price at US$1, but different exchange rates
were influencing the high prices.
Statistics by the Reserve Bank of Zimbabwe showed that the
US dollar and the Zimbabwe dollar were trading at a weighted average rate of
US$1: $1 059. On the parallel market, the local currency was trading at around
$2 100 against the US dollar.
“We have not changed the wholesale price of our bread. It
is still at US$0,90 and we expect the retailers to sell it for US$1,” Zinyama
said.
“Why the retailers are then charging that much — they have
their own reasons. Due to the volatility of the exchange rate, we have set the
wholesale price in United States dollars because if we do that using local
currency, then it means we will have to sit down as NBAZ every week to set the
bread price.
“We are not a regulator of the price of bread. We just do
the costing. The pricing is up to the bakery, but considering that we have
three exchange rates — the official, interbank and parallel — that could be
influencing the different pricing in the market.”
Confederation of Zimbabwe Retailers president Denford
Mutashu said there was need for interventions to strengthen the local currency
to minimise the price distortions.
“These are the consequences of re-dollarisation,” Mutashu
said.
“Dollarisation does not help government, business or
consumers in any way. It may stabilise prices, but just for a short while. In
the longer term the cost of doing business will be very high.”
President Emmerson Mnangagwa reintroduced the local
currency in 2019 after a decade of dollarisation.
The local currency has, however, been on a free fall,
pushing the cost of basic goods and services beyond reach as retailers,
manufactures and other companies seek to hedge against losses.
Some businesses are now exclusively demanding the United
States dollar for some selected products.
“Commodities in dollarised economies will be very high
beyond the affordability of many. Currently, retailers are in a difficult
situation. Most, if not all, suppliers are demanding payment in US$ but
retailers are expected to charge in local currency when 75% of the transactions
are in United States dollars,” Mutashu said.
“The local currency is being pushed away. There is a need
to strengthen the local currency because if we let it lose power, we are
definitely going back to full dollarisation.”
Last week, government launched gold digital currency tokens
as one of the measures aimed at stabilising the local currency. Last year,
authorities introduced gold coins, but they have done little to save the
Zimbabwe dollar.
Finance minister Mthuli Ncube last week accused businesses
of manipulating the exchange rates, warning that this will force government to
take drastic measures to arrest the situation. Newsday
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