Print Edition - 2019-04-22 | MONEY
Inflation nightmare returns to haunt Zimbabwe
Apr 22, 2019-
The price of bread almost doubled for Zimbabweans last week, as the inflation nightmare that marked the rule of long-time authoritarian leader Robert Mugabe returns to haunt his successor Emmerson Mnangagwa.There have been warnings of the mental and physical toll the rampant price increases will have on Zimbabweans after the cost of a loaf of bread rose from $1.80 to $3.50, and a tub of butter shot up to $17 from $8.50.
Mnangagwa pledged to revive his country’s moribund economy when Mugabe was toppled in 2017 after 37 years in power.
But after the central bank unveiled a new monetary policy in February, introducing a new local currency, prices of goods and services have skyrocketed at rates unseen in a decade. The disparity between the official and parallel market exchange rates has been rapidly widening, triggering price hikes of up to 300 percent.
The chief of the Zimbabwe Congress of Trade Unions, Japhet Moyo, recalls meeting a man who saw the price of medicine for his chronic illness rise so much in two months that it now costs almost his entire salary.
In February, the man bought a month’s supply of the drugs for $95. This month he forked out $300. His monthly salary is $320. “I asked him how he managed to meet the rest of his monthly expenses and he broke down weeping,” Moyo told AFP.
Moyo is angry at the government for “putting on a brave face and giving the impression that the economy is on a rebound but on the ground things are going in the opposite direction”.
The crisis has brought back memories of a decade ago when hyperinflation peaked at a grotesque 500 billion percent, wiping out the Zimbabwean dollar.
“We are back to 2008,” said Tonderai Chitsvari, a resident in the Kuwadzana township of the capital Harare. “It’s a miracle how people are surviving”.
A shortage of raw materials has caused huge difficulties for the country’s manufacturing sector.
“Last year, we spent US$2.3 billion importing things like fruits and vegetables, soya beans, wheat... toothpaste and pharmaceuticals,” said Harare economist Gift Mugano. “This is a sign that we are not producing even the basics,” he added.
“We are not talking about manufacturing an aeroplane here. We are talking about saving scarce foreign currency by growing wheat to bake our bread and soya beans to produce our own cooking oil.”
Formerly a regional breadbasket, Zimbabwe’s economy has been in a dire state for more than a decade, with the unemployment level soaring to more than 90 percent.
Published: 22-04-2019 10:14