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Total chaos as government does U-turn on some prices
Tererai Karimakwenda, SW Radio Africa
July 25, 2007

http://allafrica.com/stories/200707250734.html

Shops and informal traders are reporting more confusion on the ground in Zimbabwe after state media reports announced that the government had relaxed price controls on some items such as bread and cooking oil. The information has not been widely circulated by the officials so prices on the same goods are varying from one place to another.

Harare based journalist Angus Shaw said this is the most confusing period since the authorities ordered businesses to cut their prices by 50% several weeks ago. Shaw added that there is nothing on paper allowing the price increases so people, the media, the police and the government are all confused. The state media reported that government is drawing up a new pricing structure that would take into account production and replacement costs.

This is exactly what the government had ignored despite warnings by experts that the price reductions were unsustainable and would lead to business closures and shortages of basic items. And indeed many shops have closed and shelves remain empty. Shaw said although prices are now increasing, the products are still very difficult to find. He described the shortages as drastic.

The state's Herald newspaper confirmed the price increases, saying government had created a Cabinet Taskforce on Price Monitoring and Stabilisation, and the National Incomes and Pricing Commission in the last three weeks. It is not clear when the new pricing structure would be introduced.

The report said a standard loaf of bread was now pegged at $44 000, 100% up from the Z$22,000 it was selling for earlier this week. Other increased prices listed in The Herald include: 2kg salt which is now selling at Z$184 000, 375ml peanut butter Z$172 000, 250g tea for Z$287 000 and a bar of soap is selling at Z$268 000.

Meanwhile, there were other disturbing reports that farmers in the rural areas were being forced to sell their meat products and cattle to the Cold Storage Commission (CSC) at very low prices. The CSC has been designated the sole distributor of meat products to butchers, despite having been shut down due to mismanagement, corruption and massive debts.

Shaw said farmers were being stopped at roadblocks by police and soldiers who were confiscating goods, particularly maize-meal and meat. He said sometimes the officials kept the confiscated products for themselves because shortages are affecting them as well. A public debate on the government's price control policy has been organised by the Mass Public Opinion Institute in Harare. It will take place on Thursday at the New Ambassador Hotel in Harare.

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