The price of bread rose by more than 30% as stores in Zimbabwe opened for business on Monday, the latest blow to consumers in the country’s teetering economy.
A regular loaf went up to Z$60 000 (about R3,68), from the government-controlled price of Z$44 000 (about R2,70).
Bakers said price increases in uncontrolled ingredients, including sugar and yeast, threaten the viability of their businesses, though they receive subsidies on flour in a bid by the government to keep prices down.
The private Confederation of Zimbabwe Industries said if bakers were prosecuted under state price-fixing regulations, existing shortages of bread, a staple food, would worsen, leaving many shelves empty.
Bakeries and stores also face inflation-linked wage increases ordered by the government and massive increases this year in power and gasoline charges, the confederation said.
Last month, official inflation soared to 613%, one of the highest rates in the world. Few Zimbabweans earn more than Z$10-million (about R600) a month.
In its latest survey of a sample of 200 businesses, including bakeries, the confederation said three-quarters reported earning revenues below inflation, nearly half the firms surveyed were operating at less than 50% capacity and some had cut working hours.
Overall, the 200 firms laid off 42% of their work force during 2005 as formal unemployment exceeded 70%. Scores of small to medium-sized manufacturing businesses closed down altogether in 2005.
Soaring black-market prices are not factored into official inflation figures.
The official Zimbabwe dollar-United States dollar exchange rate of 99 000-1 compared with an unofficial rate of upward of 190 000-1 on Friday.
The buying power of the local currency has plunged since the often-violent seizures of thousands of white-owned farms since 2000 disrupted the agriculture-based economy.
A single building brick now costs Z$15 000. In 1990, an entire three-bedroom house cost Z$200 000, or 14 bricks today. — Sapa-AP