Bread price goes up as clampdown forces bakers underground

By Lance Guma
26 September 2006

A government attempt to fix the price of bread has backfired miserably with reports that the country’s bakers are now shunning the formal market and selling to black market vendors. Six directors from several leading companies, including bread maker Lobels, were arrested over what the authorities called ‘unsanctioned’ price increases. Lemmy Chikomo, Lobels Operations Director, was arrested after the company increased the price of bread from Z$200 to Z$335 for a loaf. To circumvent further crackdowns the bakers are now supplying a few thousand loafs to the formal chain, before selling the majority of their bread to vendors.

Simon Muchemwa in Harare reports that the bakers are selling at between Z$300 to Z$335 per loaf to the vendors who in turn sell at over Z$350 to the consumers. Supermarket shelves have no bread and the little that is being supplied is being snapped up by shop employees, leaving desperate shoppers to resort to buying from the black market. Muchemwa says instead of the consumers benefiting from governments clampdown they are now at the mercy of the vendors who can charge whatever they want depending on demand.

September has been a bad month for the country with a decline in the value of the Zimbabwe dollar coupled with inflation at over 1,200 percent, forcing prices to shoot up. The state controlled newspapers also reported an increase in the price of anti-retroviral drugs by almost 100 percent over 3 months. From July to September the cost of imported ARV ‘s rose from Z$10 000 to Z$20 000 while the locally manufactured ones shot up to Z$25 000. The increases are set to affect a considerable portion of the population who are HIV positive and rely on the drugs. Cabinet ministers and other senior Zanu PF officials have often been accused of hijacking donated ARV’s for their own use and leaving poor people vulnerable.

NB: Exchange rates on the parallel markets as at 26/09/06

1 Rand= Z$150
1 Pula= Z$200
1USD= Z$950-1200
1 Pound= Z$1950