Turning the people into a nation of speculators


No one paid any attention to the 70-year old grey-haired woman as she sat rather passively, looking very innocent while they queued for bread outside a grocery shop in Gwabalanda. No one paid any attention to her five young grandchildren as they sneaked in and out of the shop, beating the long winding queue, buying the one loaf, each, restricted by the shopowner and handing it over to their granny who stuffed it into a “saga” bag. It was only after the bread had been sold out that they noticed the old woman. She was now a selling the bread she had bought for $60 for $160. She was so daring that she did not move an inch. The queue switched to her, though everyone was now quite aware she had bought the bread from the shop outside which she sat.

The old woman is not alone. The shortage of basic commodities such as bread, maize, sugar and fuel is rapidly turning Zimbabwe into a nation of speculators. Everyone wants to cash in on anything and everything, given an opportunity. Even the World Cup cricket tickets are now up for grabs. While there is an acute shortage of bread in shops, tuckshops in the high density have plenty of bread provided one is prepared to cough up between $180 and $250 a loaf. In the low density suburbs, bread is also readily available at private homes for the same price. And people are buying, turning the price controls announced by the government into a gigantic farce.

It is not clear why the government went ahead with the price controls, in the first place, when Finance Minister Herbert Murerwa, had frankly admitted that they were not benefitting the general population, but “speculators and dealers”, when he announced his 2003 budget on November 14. Instead of cushioning the general population, price controls have worsened shortages because products vanish from the shelves as soon as price controls are imposed. They resurface on the black market at three to four times the controlled price. Price controls have, instead, created a new culture of greed that is forcing most speculators and dealers to amass products that are likely to be in short supply for personal gain.

One of the country’s leading bread manufacturers in currently investigating two of its managers because they were diverting bread to their shops where they sold it for $180 a loaf. In another case a manager of the Grain Marketing Board is being investigated for selling maize at 13 times the controlled price. The shortage of maize has been astounding as figures of maize imported exceed normal consumption, meaning that there is wholesale hoarding of the commodity which is then sold on the black market. Even the so-called task force has failed to solve the distribution problem as some of their members are alleged to be cashing in on the shortage. A 5kg of mealie meal is selling for as much as $2 300 on the black market, more than10 times to controlled price.

The same applies to sugar. It is not available in the shops, yet one businessman was recently caught with five tonnes which he allegedly wanted to export to the Democratic Republic of the Congo. When sugar is available in the shops, the amount of 10 and 15kg packets people buy clearly shows that the sugar is not for household consumption. Shopowners, some of whom are flouting the regulations, are not making things easier either. If they find a buyer who is prepared to take the whole lot and pay cash, they sell to that speculator. In one shop for example, one customer was allowed to buy more than 200 five-litre tins of oil which was on special offer. Apparently oil was in short supply and the cheapest oil available was going to $11 000. The oil on special offer was selling for $6 450.

Corruption is more rife in the fuel industry. Though reports say police will fine anyone who pours fuel into a container as much as $20 000, fuel is readily available on the black market for that amount for a 20-litre can. Some dealers claim to be obtaining the fuel from Botswana yet it is well known that they are selling it on behalf of either garage attendants or owners. One vendor is reported to have made a killing at Christmas when he sold a 20-littre tin to a stranded tourist for 100 pounds sterling, making a profit of over 2000 percent. One garage owner, who was found with more than 30 000 litres of fuel at her service station was allegedly selling the commodity in Zambia at $140 000 a drum. A drum costs only $14 948 at the pump. Fuel attendants are also making a killing by charging back-handers to fill up people’s cars. Some will be limited to 13 or 26 litres while those who pay bribes drive away with full tanks.

The corruption that has been fuelled by current shortages has destroyed the entire concept of customer care. Instead of attendants, whether they are in shops or service stations, asking what they can do for customers, it is now customers who look for attendants to ask for help. Even if things return to normal, it may be very difficult to bring that culture of customer service back. And a return to normality might be painful to those capitalising on the black market as they will lose a vital source of income. But they will continue to cash in for the time being.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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