Harare | Wednesday
ZIMBABWE could face massive bread and other food shortages as well as labour unrest as a result of strict price controls imposed by the government last week, business leaders have warned.
Jacob Dube, president of the Confederation of Zimbabwe Industries, warned that bakeries would suffer losses of 1,8-million Zimbabwe dollars ($32 700) a day because of the government’s decision to set bread prices at 44 dollars a loaf.
Producing a loaf of bread cost 52 dollars, he said.
“If it (the baking industry) suffers, there will be no more bread on the shelves. This is a big possibility,” Dube told a press conference.
Bread, sugar and cooking oil — all affected by the prices controls — have already disappeared from many store shelves as suppliers say they are unable to continue selling at the reduced prices.
The government-mandated prices are five to 20% lower than the going rates of last week.
Zimbabwe’s major bakeries have already put workers on reduced hours and slashed their output because of the price controls, and several have warned that unless the prices are revised they will have to close.
Business leaders also warned that additional closures would worsen unemployment, estimated at more than 60%.
“Unemployment has reached unprecedented levels and may deteriorate as a result of price and salary controls,” said Kenzias Chibota, president of the Business Leaders’ Forum.
“As businesses, we are concerned as this implies a loss of consumers, negative social impact and risk of labour unrest,” he said.
Zimbabwean President Robert Mugabe on Monday warned that the government would nationalise firms that close, saying “they are our businesses anyway. … The socialism we wanted can start working.”
His remarks came as some 150 pro-government militants criss-crossed the second city of Bulawayo warning shop owners not to resist the price controls, according to state media.
In March and April, militants led by liberation war veterans had stormed businesses around Zimbabwe, purportedly to resolve labour disputes but often extorting money from employers.
Hundreds of businesses have closed during the last two years as Zimbabwe has suffered a devastating economic depression.
The official rate of inflation hit 86% last month, according to Dube but prices for transport and many basic foodstuffs have risen much faster. Meanwhile, year-on-year inflation jumped to 86,3% in September, more than 10 percentage points above the previous month, the Central Statistical Office (CSO) said Tuesday.
The figures were a further sign of deterioration in Zimbabwe’s battered economy, mired in depression for the last two years.
Zimbabwe’s Business Leaders Forum warned on Tuesday that inflation in specific areas has far outstripped the official rate, with transport costs rising 165% over the last year and communications costs rising about 300%.
Economists have projected that the official rate of inflation will reach 100% by the year’s end.
Skyrocketing costs for basic foodstuffs prompted the government last week to impose price controls, reducing the price of items such as bread, sugar, cooking oil and meats by five to 20%. The result has been shortages of many of those goods, as producers say the new prices are below their production costs. – AFP
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