12 July 2007

Zimbabwe: Businesses Lose Billions to Task Force Looting

The government's price monitoring task forces are reported to be forcing many businesses to reduce their prices beyond the levels stipulated by the new law published last Friday. Shops around the country lost billions on Thursday as the price monitors allowed mobs of shoppers to empty the shelves within hours, buying products at prices made up on the spot.

Public transport is also in crisis. According to the state press police in Harare impounded 49 commuter omnibuses and arrested their drivers for overcharging. They are being held at Mbare police station. Our sources in Bulawayo said minibus operators went on a wildcat strike Thursday protesting the reduced fares which they say do not cover their costs for fuel and parts.

Even the state run ZUPCO buses are reported to have stopped operations.

The state run newspapers reported that at least 1 768 business people have been arrested countrywide and 1 328 companies have appeared in court since the government ordered price reductions two weeks ago. They have been ordered to pay fines ranging from Z$70 million to Z$100 million. The deepening crisis has raised fears in South Africa, where the umbrella labour and business unions expressed deep concern for the people in Zimbabwe and the threat to South African businesses.

A South African owned Makro super store in Bulawayo was looted Thursday after a price task force reduced the price of goods by two thirds. Bulawayo businessman Eddie Cross told us the team arrived at 10am and reduced the price of televisions, refrigerators, books, beans and other imported goods by two thirds. But imported goods are not subject to the government price controls. There were near riots as shoppers grabbed what they could. By 3:00 pm the shelves were empty. Cross said he spoke to some staff members who told him they had lost billions of dollars and will not be able to restock.

The Makro store in Harare shut their doors Wednesday but were forced to reopen Thursday and sources say they had ridiculously low prices dictated to them. The queues stretched for miles down the road, and like their sister store in Bulawayo, they were wiped out and lost billions. The Herald reported that the chief executive of OK Zimbabwe, Willard Zireva, has also been arrested and faces 41 charges for 'overpricing' at two of their retail supermarkets. This means three executives of South African companies have been arrested so far.

The Congress of South African Trade Unions (COSATU) and the Business Unity South Africa (BUSA) released separate statements expressing deep concern at the deteriorating situation in Zimbabwe and the threat it poses to South African owned businesses. BUSA plans to send a mission to Harare to investigate the role South African business could play to help end the crisis.

The South African government has been remarkably silent.

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