Zim businesses reduce prices after government threats

Zimbabwean businesses have started to reduce prices of services and commodities following threats issued by President Emmerson Mnangagwa that the government would be taking measures to enforce price reductions.

The Zimbabwe Republic Police, meanwhile, have also warned they would be enforcing the pricing of goods in local currency.

Simbisa Brands, the Zimbabwe listed operator of Nando’s, Steers and Chicken Inn, is among the big companies that have effected price reductions. The company has reduced prices for most of its fast foods offerings, although it has hiked the price of bread, which remains in short supply on formal markets.

Other companies that have reduced prices include informal retailers, who had pegged their prices at the parallel market exchange rate for the US dollar and local currency.

‘Dealing with’ high prices

Mnangagwa said earlier this week that government was developing measures to deal with price increases by businesses. He instructed Zimbabweans to shun outlets refusing to lower prices and buy from those that had reduced their pricing.

“We are planning effective measures to deal with those who refuse to lower prices.

“The measures are being developed to make sure they are effective when we implement them,” Mnangagwa said, while opening a road construction project.

Zimbabweans have been debating the movements in prices on social media platforms. Some still feel the price reductions do not give sufficient respite to hard-pressed locals, where salaries have mostly remained stagnant for those still formally employed amid a push for salary reviews by workers’ unions.

Prices has started to go down following introduction of SI 142/2019.E “kudira jecha”clan now feeling the heat.bek to sender.”Akanda dombo richamutema,”Mathias Mhere singing.@nelsonchamisa #TogetherWeCan. pic.twitter.com/5wMqN7s5h3

— Rudo Saungweme (@rudosau) July 4, 2019

8. So for sectors that are relatively more dependent on imported inputs, very little is gained from de-dollarising and from nominal depreciation. They have to adjust prices to match the exchange rate as it is a key determinant of their cost of production

— Zimbabwe Economic Analysis ???? (@mutungadzimwe) July 3, 2019

These prices are still too high nxa, 2 piecer yaiita USD2 now $20. Wat is the basis? sure this stuff is not basic so whatever but this is still nothing to celebrate.

— Saphle (@Saphle4L) July 3, 2019

The Zimbabwean police service has taken this up and has warned retail outlets and other businesses to only sell in local currency.

ZRP national spokesperson, Assistant Commissioner Paul Nyathi, said: “Supermarkets and shops are implored to display commodity prices. The ZRP warns all those who are charging commodities in United States dollars that they risk being arrested… members of the public should report such cases to nearest police station.”

A petrol attendant at a filling station just outside central Harare told Fin24 that sales in US dollars had been suspended “until further notice”.

This comes as Zimbabwe’s economy has continued to struggle against uncertainty in the aftermath of new the monetary policy measures.

Zimbabwean exchange rates have increased marginally on both the formal interbank and informal markets.