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The tragedy of a country in a basket
IRIN News
May 29, 2007

http://www.irinnews.org/report.aspx?ReportID=72429

The decrease in spending power caused by the world's highest inflation rate is seeing basic commodities being sold in smaller packages, both in Zimbabwe's formal and informal marketplaces.

With an inflation rate of 3,713 percent, prices of goods are not only changing on a daily basis, but are resulting in the sale of smaller portions in a practice referred to in the poorer suburbs as the 'Tsaono Basket'.

The 'Tsaono Basket', meaning 'tragedy' in the predominantly spoken language Shona, has evolved from small scale street traders reducing the size of commodities for sale, by repackaging and downscaling the goods, to make basic commodities more affordable for an increasingly impoverished population

Shamiso Zvenhamo and her neighbour Nelia Chiomo routinely spend their afternoons repackaging beans, rice, sugar and other basic commodities into smaller packs to resell at the local shopping centre in the evening. So a standard bar of soap is cut into three tablets, and then each priced at just slightly more than a third of the price of a full bar, while rice is sold by the cup, as is other food stuffs such as beans, and cooking oil is decanted into smaller plastic bottles or measured out into a customers own container.

The two housewives are cross border traders and regularly go "down South" (South Africa) to source cartons of soap, cooking oil, rice and other grocery supplies, to resell in their home suburb of Kuwadzana, a working class district in the capital Harare.

The two women are part of huge band of subsistence traders who also have to contend with regular raids on their stalls by the police, Chiomo, a mother of three, told IRIN, but "nowadays there is the added danger of armed soldiers who can appear at any time and order us to go home, apart from the frequent swoops by the municipal police."

Independent economist Tony Hawkins told IRIN that the downsizing of commodities was also commonplace in Harare's supermarkets and was a "symptom of an inability to live on the salaries that are being paid."

The government-funded consumer watchdog, the Consumer Council of Zimbabwe (CCZ), priced its latest monthly cost of living for a family of six at Z$1,7 million (US$34 at the parallel market rate of Z$50,000 to US$1), where only two out of 10 people have work and even then, the majority of those with jobs earn substantially less than what is required for adequate nutrition.

Phillip Bvumbe, chairman of the CCZ, told IRIN, "As a consumer watchdog, we have gradually accepted the existence of the Tsaona Basket as a measurement of a family's survival needs. This is despite the difficulties in coming up with precise measurement and benchmarks."

"These subsistence traders serve a useful purpose to the poor. Otherwise some families would go without food on their tables had it not been for such enterprising petty traders," he said.

Profiteering

Bvumbe said the Tsaona Basket is a product of daily price increases for basic commodities, which he blames on the manufacturers "insatiable appetite for making super profits", a situation he believes would only be rectified by the introduction of stringent price control measures.

Callisto Jokonya, the president of the Confederation of Zimbabwe Industry (CZI), denied the charge of profiteering by his members and business people and said "Every entrepreneur is in business to make money. We should be credited for keeping industry afloat in an environment where the cost of inputs rises on a daily basis."

Jokonya attributes the frequent price increases to the persistent foreign currency shortages, which have forced manufacturers and industry to operate at 10 percent of their production capacity. "Most businesses buy foreign currency on the black market in order to survive. The exchange rates change on the whims of those that possess the hard currency. So manufacturers pass the costs to the consumer."

He said the introduction of price controls were not the answer to the country's economic woes, because "Price controls create shortages. They have an adverse effect of transferring products from the shop shelves to the pavements where informal traders charge higher prices than if the goods had remained on shop shelves."

[ This report does not necessarily reflect the views of the United Nations ]

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