A common one shows a 2.3kg pack of meat priced at $41.51. Another shows a $30.99 pack of nine toilet paper rolls.
These prices are shocking because they represent an average 300% jump in a matter of days. But these are not US dollar prices. They are ‘unofficial Zimbabwe dollar’ prices.
This reality is reflected in pharmacies and restaurants, among other businesses, which have adopted dual pricing, in US dollars and local currency.
The absurdity of insisting on the US dollar-local currency parity was recently highlighted by a coffee shop receipt which showed a mind-blowing 1 676.92 rand receipt (US$109) for 10 bottles of Minute Maid juice and three chicken mayonnaise sandwiches.
Last week, government intervened to stop a proposed 100% bread price increase. By any standard, a 100% price increase, just months after another 10% jump, is enough to induce shock. In reality, however, Zimbabwe’s standard loaf costs about 33 cents.
By comparison, South African bread prices have tended to track the rand rate against the US dollar.
Zimbabwean business executives, with notable exceptions such as Radar’s Ken Schofield, generally fear openly criticising government policies. Although oil manufacturer Surface Wilmar recently went public with hard-hitting criticism of the government’s economic policies, many Zimbabwean businesses still choose to bury their heads in empty shop shelves.
As panicky consumers rapidly emptied shops in a frenetic first week of October, many businesses failed to cope with the surge in demand as well as the currency collapse. Many businesses, including fast-food chain KFC, had no option but to close. While some establishments did openly announce they would close on account of the market upheaval, some, including a major supermarket chain, hid behind the ‘closed for renovations’ fig leaf.
Government’s deception, it would appear, has been outsourced to the private sector.
If bond notes have caused the most damage to government’s credibility, its tendency to oversell infrastructure and investment deals comes a close second. Aided and abetted by an over-eager state media machine, government has drawn unnecessary derision, and pressure, for selling even exploratory agreements and memoranda of understanding as ‘mega deals.’ In the run-up to the July 30 election, Mnangagwa went into overdrive, playing up ‘investment commitments’, reportedly worth billions of dollars, as if they were actual investments. Now, as the economy tanks, a frequent question is: what happened to all those mega-deals? – newZWire
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