Eupha Mahenga
17 November 2002
opinion
A DESPERATE move by the Zanu PF government to protect consumers from economic hardships it created by imposing unpopular price controls on most basic commodities has backfired, causing more hardships instead
Effected late last year by the desperate ruling party which sought to ensure the re-election of President Robert Mugabe in the face of a strong challenge from MDC president, Morgan Tsvangirai, the price controls have caused havoc in the country threatening the livelihood of many people
The effects of the controls have been so drastic that life in Zimbabwe has been transformed into a nightmare
An acute shortage of commodities that are on the controlled prices list is now the order of the day, condemning Zimbabweans to a life in queues
Such basic commodities as mealie meal, cooking oil, salt and sugar which were always readily available have vanished from the shelves, fuelling the parallel market where the prices are out of reach of ordinary Zimbabweans
On the parallel market a thin loaf of bread now costs between $150 to $280. Around March this year, a bigger and nutritious loaf cost $30
A 5kg pack of maize meal which a few months ago went for $130 has gone up to $650. The same unrealistic price increase have been effected on other commodities which are hard to get in the country
This scenario has caused untold suffering to people who are adjusting to life without a slice of bread each morning and food prepared without cooking oil. At one time locals learnt to endure meals without salt which was in short supply
In fact, most Zimbabweans who are either low income earners or have no income at all are now reliving the colonial era when they could only afford to eat bread at Christmas. During that time every family, especially those in the rural areas, expected the treat of having bread at breakfast
However, for this festive season things could be much worse as the commodity is likely to be unavailable for the traditional heavy Christmas breakfast
Things have become so bad that even finance Minister, Herbert Murerwa, admitted before President Mugabe on Thursday that price controls had become a threat to Zimbabwean society
Said Murerwa while presenting the 2003 budget to parliament: "Efforts to protect the consumer from spiralling prices are being undermined by price controls that focus mostly on the final product, ignoring developments affecting inputs into the production process. This has affected production viability and the sustainability of the controlled price levels. As a result, the real costs to the society have been high" The real beneficiaries of the system, Murerwa noted,were the speculators and dealers and not the targeted vulnerable groups, who were now watching helplessly as their breadwinners and friends lost employment as companies retrenched workers owing to viability problems occasioned by unsustainable price control levels
Victor Chisi, a senior manager with the Consumer Council of Zimbabwe (CCZ) told The Standard that although noble, the introduction of price controls had created more problems for the country
"The idea was noble because the people could not afford the commodities. However soon after the introduction of the price controls the commodities ceased to exist on the shelves, giving rise to the thriving informal market," said Chisi
He added that the prices had become so high that consumers could not afford them, prompting his organisation to call for boycotts on the expensive items
Only last week, CCZ called for a beef boycott as a way of illustrating the plight of the consumer. Prices of economy beef have shot up to between $800 and $1000, way beyond the reach of many Zimbabweans
A small scale retailer from Ruwa who confessed that he did not have much knowledge of economics, told The Standard that by introducing price controls, Mugabe's government had revealed its ignorance over basic economic matters
"The aim of every retailer or business is to make a profit. By buying products at an uncontrolled prize and selling them at a controlled prize one simply makes a loss. In such an environment, he or she has no option but to close shop. I was surprised that government actually created such a condition that forced us to close down our businesses and later blamed that on Tony Blair," said Munashe Tshuma
Despite this state of affairs, the government yesterday announced, in an extraordinary gazette, that it had extended price controls to the agricultural, motor and newspaper industry
The education, building and technology sector were also not spared
This move, which will also freeze the price of vegetables, means almost everything sold in Zimbabwe now has a controlled price.
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