The Zimbabwe government is taking steps to implement the price rollback ordered earlier this week. Ruling party thugs are encouraging recalcitrant shop owners to comply, and the government has launched a scheme to subsidise production of goods whose sale price is now controlled. At the same time, retail sellers are protesting the price controls by removing goods from their shelves. All in all, a complete—and entirely predictable—mess.
Zimbabweans are facing starvation as shop owners remove basic commodities from shop shelves ahead of police and soldiers' patrols to identify retailers who have defied government directives to reduce prices.A survey conducted on Wednesday showed that most basic commodities were no longer available in shops as shop owners silently protested against the government directive.
Stores that complied with the rollback order were inundated with shoppers, so their shelves were cleared as well.
Public subsidies were necessitated because the controls cover only producers’ selling prices, not workers’ wages. In order to keep producing companies afloat, the government has to underwrite wage payments. Because the government has no funds available for this purpose, the financial support can only aggravate hyper-inflation.
The move however promises to plunge the economy deeper into crisis as the cash-strapped government will be forced to print money to finance the subsidies.
. . .
Government promised to sell flour to bakers at $10 million a tonne instead of the market price of $20 million while fuel will be supplied at $15 000 a litre instead of the prevailing market price of $150 000. All suppliers of basic commodities have also been assured of the cheap fuel.
. . .
Government has continued to scuttle the process of economic recovery. Its debt stands at over $2 trillion owing to huge borrowings to finance government departments and parastatals. The fiscal budget has become a dead letter owing to inflation.
Zimbabwe is becoming a cash-free society. As soon as workers are paid, they rush to the banks to cash their cheques and then spend the cash as quickly as possible. Here’s what can happen if you’re slow to get rid of Zimbabwean currency.
I popped out for a Z$25,000 loaf of bread last Friday. It had gone up to Z$30,000 dollars. I ran home for the extra, ran back to the shop - and the price of my loaf had risen to Z$44,000.
It’s easier and less aggravating simply to avoid holding that worthless paper. More and more Zimbabweans are resorting to barter exchange at every opportunity.
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